Anyone watching the emerging markets?

[Techdread]

Re: Anyone watching the emerging markets?

it was a loaded question, I was talking about You dcarrigg, will you hoard what you make, because the way AI is going it will be like the mobile phone and augment us all.

AI thrives on data, every human is a data making machine... European Union is a clever institute and have thought of elements of this already I envisage a future were everybody is payed for the data they produce.

[GRG55]

Re: Anyone watching the emerging markets?

Even if this could happen, and you know I'm not bullish on big tech marketing voodoo like AI, do you really think the capital generated by the productivity boost would be spread out anywhere approaching evenly enough in any country to actually take care of most of the people? Or would it just create a handful of trillionaires and leave everyone else exactly as poor and miserable as before? 30+ years of productivity gains have led to approximately 0 wage or disposable income gains in most of the developed world now. Even if the economic capacity to handle the problem is there, the political will to let even a dime trickle down from the gilded peaks of Parsenn is non-existent.

This.
I've been thinking about this quite a bit, trying to distill how we possibly got here and where does this all take us.

The deliberate breaking of the inflation cycle from Volker's high interest rate policies in 1981/82, and the subsequent deflationary bust, shifted power from labour. Perhaps permanently? The 1970s era of COLA clauses came to an abrupt end when real interest rates went positive. Those wage increases could no longer be depended upon to be rapidly inflated away.

However, wage rates can be very sticky, even in non-unionized firms. Those industries that thrived in the inflationary 1970s, including the resource/commodity sector, laid off people through repeated "restructuring" but were reluctant to cut wages for those who survived. A whole new vocabulary was invented around that activity of layoffs - "voluntary retirements", downsizing, rightsizing, we know them all. But layoff programs were tentative through the 1980s as those firms still expected the good old days of inflation to return. I had a front row seat during that time and I doubt a single management team in the industry I worked in (hydrocarbon exploration and extraction) ever expected crude oil prices to fall for two full decades - all the way through to the infamous $10-headed-to-$5/bbl "Drowning in Oil" Economist magazine cover in 1999. From my vantage THAT is when the towels finally got thrown in and wages started getting seriously cut in those now "lean-and-mean" companies (that first wage cut for me in 2000 was one factor that prompted me to resign, bail out and go overseas to eventually found my own firm).

I believe during that secular deflationary era the real cost of capital was high and drove the marginal propensity for firms to keep investing in technology to replace labour to improve productivity. I don't think its any accident venture capital and development capital started to move into the tech sector aggressively, and many of the iconic US headquartered global tech companies (Microsoft, Sun Microsystems, Intel, Cisco, Motorola, etc) came of age in the decade of the 1980s. In the 1980s, as it cut staff, my employer went from three Cray supercomputers in a glass house to Sun workstations with more total computing power and software capability on geoscientist's desks in less than three years. Engineering software that could better simulate process conditions led to dramatic optimization and cost reductions in plant and equipment design, and our Houston-based global process engineering group slowly shrank to nothing. I could go on and I know everyone here has their own examples.

Perhaps the "stickiness" and pace of wage adjustments further underpinned the tech investment trend in the 1980s? And perhaps this also seeded the "financialization" of our economies? When real interest rates go positive (and stay that way) and capital becomes expensive and valuable, those who have it make the gains.

I think we really went off the rails because of the unique political make-up of the "Anglo-Saxon" nations (by that I mean essentially North America, the UK and to a lesser degree parts of western Europe, which, like Mexico, is influenced by proximity).

Everywhere else I have lived and traveled in this world politics is one of first gaining political position & power and then using it to enrich oneself. Works that way from the Ruling Family kleptocracys of the Persian Gulf, to the perpetual military governments such as Egypt and the Presidents for Life in Africa and the FSU. Even in China and France, as examples, a groomed political elite maintains a tight grip on the national income through the enormous portions of the economy that are State owned or State controlled, and protected (the same might apply in some ways to the EU bureaucrats in Brussels).

Historically our little part of the world worked exactly the other way around; one got wealthy, usually through productive business success, and used that wealth to exert political influence. I think this ideology was the underpinning of the almost uniquely US/UK/Canadian mass privatizations of State entities during the Reagan/Thatcher/Mulroney era. Like most things, in moderation this might not have been a bad way to run an economy.

But the financialization has long swung to an extreme. Those with capital, and even those just employed in the activity of managing capital (Jamie Dimon comes to mind), amass vast quantities more of it as Central Banks forced a cash supportive deflationary bias (real interest rates stayed positive despite ZIRP/NIRP) while flooding the world with liquidity. To our detriment we now have our own versions of the kleptocrats and Presidents for Life in control of public policy instruments; a rhyming replay of the 19th century corporate robber barons? Productive investment, even in tech, has been replaced with speculations in social media firms, companies masquerading as technology pioneers (e.g Tesla) and huge global inflows into the least productive asset of all - residential property.

I agree with dcarrigg. AI is an over-promoted side-show. And I see no reason it will not further concentrate wealth and power.

In my view the change, if there is one, has to come from whatever political influence our public can achieve. The debate is how do we distribute the national income? We are seeing some small signs of these debates changing things already. Jury's out on how all this plays out, however:


- As reviled as he may be among Democrats, as an outsider looking in, it seems to me that a "Republican" President Trump was elected on a platform of US isolationism and more domestic government intervention. And there is no doubt the USA is getting it.

- The Conservative government in the UK almost got its walking papers, and I think would have if Labour had a more middle-spectrum leader. But Corbyn continues to poll well and some of his ideas to reform UK politics, including "community campaign units" are finding genuine appeal. As with the election of Donald Trump, what once seemed politically inconceivable becomes acceptable with continued unmet expectations.

- In my native Canada that most conservative and "American" of Provinces, Alberta, threw out a 40 year Conservative reign and went completely to the other side of the spectrum, electing an interventionist "socialist" NDP government for the first time in history. Neighbouring British Columbia also now has an even more interventionist NDP government, and the election this coming Thursday in Canada's wealthiest and most populous Province, Ontario, is worth watching. It is shaping up to be a dog fight between the NDP left and the Conservative right as voters appear on the verge of all but annihilating the current middle-of-the-political-spectrum 15 year old Liberal government. An example of how far apart the positions are in a race that is currently polling almost dead even in the popular vote across the Province: "Andrea Horwath wants landlords spanked and renters supported, will bring in a BC-style ‘speculation’ tax and actually legislate rents lower. Doug Ford says he would remove government from the marketplace, reducing regulations to help homebuilders and get rid of the foreign buyers tax."

- Canada's left-leaning national government, "Liberal" in name only, in this past week alone a) announced immediate tariffs (in response to steel and aluminum tariffs announced by Wilbur Ross) against the USA, by far its largest trade partner; b) blocked the acquisition of one of Canada's largest engineering/construction companies by a Chinese SOE; c) committed more than CAN $10 Billlion to first nationalize and then expand a Kinder-Morgan owned oil pipeline.

Can we spell "guaranteed annual income"?

[GRG55]

Re: Anyone watching the emerging markets?

it was a loaded question, I was talking about You dcarrigg, will you hoard what you make, because the way AI is going it will be like the mobile phone and augment us all...

Pray tell how mobile phones, once past making wireless phone calls and sending text messages, "augment us all" in any sort of economically productive or socially useful way?

The vast majority of "the data" being produced seems to be snap shots of people's lunch plates, ill tempered personalized Twitters about fellow human beings, a convenient mechanism to distribute titillating revenge pictures every time a Hollywood "relationship" breaks up, and outright falsehoods about people and events that instantly take on validity while they decimate careers and lives. Personally I think the deterioration in critical thinking has been dramatically accelerated by mobile technology and social media, to the point that there is no room for reasoned debate as its all wrapped up in the emotion of the moment now. We can create the demonizing effect of the Spanish Inquisition on a global scale in a mere day or two now. More than ever we are all prisoners of our everywhere-and-anywhere mobile enabled instantly reinforced belief systems.

AI thrives on data, every human is a data making machine... European Union is a clever institute and have thought of elements of this already I envisage a future were everybody is payed for the data they produce.

Like you, I have confidence we are going to see remarkable breakthroughs in medical technologies (not necessarily dependent on AI either). But I have a great deal less confidence those technologies are not going to be hoarded and priced to continue to bankrupt those unfortunates who the fates have determined shall need them.

And I see no potential that people will be paid for "the data" they produce. I see much greater potential people will be required, under threat of penalty, to give up more and more personal information to our governments, for their allegedly benign, socially progressive and "necessitated by security needs" purposes. Look around you. Its already been happening in spades.

[GRG55]

Re: Anyone watching the emerging markets?

For a bit of comic relief. The disgruntled voters of Ontario, caught in a ferocious HRC (the NDP's Andrea Horwath) vs DJT-clone (the Conservative's Doug Ford, yes, the brother of the late crack-smoking Toronto mayor Rob Ford - it doesn't get any better than this) style polar extremes election campaign, have found a new candidate:




"Disgruntled Torontonian Zoltan Hawryluck had a few drinks one night and decided that Zod should run. “General Zod is dedicated to the subjugation of the people of Ontario,” Zoltan says. “He is a ruthless dictator. In short, a better choice than Doug Ford.” As you might imagine, Zod lawn signs have been in hot demand."

[Techdread]

Re: Anyone watching the emerging markets?

Pray tell how mobile phones, once past making wireless phone calls and sending text messages, "augment us all" in any sort of economically productive or socially useful way?

Because making a wireless call to any part of the world with a device that fits in your pocket would not seem like magic 100 years ago?

Or using Google translate to talk to a stranger does not seem like magic.

The vast majority of "the data" being produced seems to be snap shots of people's lunch plates, ill tempered personalized Twitters about fellow human beings, a convenient mechanism to distribute titillating revenge pictures every time a Hollywood "relationship" breaks up, and outright falsehoods about people and events that instantly take on validity while they decimate careers and lives. Personally I think the deterioration in critical thinking has been dramatically accelerated by mobile technology and social media, to the point that there is no room for reasoned debate as its all wrapped up in the emotion of the moment now. We can create the demonizing effect of the Spanish Inquisition on a global scale in a mere day or two now. More than ever we are all prisoners of our everywhere-and-anywhere mobile enabled instantly reinforced belief systems.

Bio metric data, shopping habits, what we eat, are location will be valuable data points in the future, the biggest problem will be making the data anonymous.

Like you, I have confidence we are going to see remarkable breakthroughs in medical technologies (not necessarily dependent on AI either). But I have a great deal less confidence those technologies are not going to be hoarded and priced to continue to bankrupt those unfortunates who the fates have determined shall need them.

I agree that some will try to hoard it, but hoarding the compute power in a connected world is hard, the techniques are published in journals lots of code on Github and a lot of the people with the know how are very moral just look how Google fared when they signed a pentagon contract.

And I see no potential that people will be paid for "the data" they produce. I see much greater potential people will be required, under threat of penalty, to give up more and more personal information to our governments, for their allegedly benign, socially progressive and "necessitated by security needs" purposes. Look around you. Its already been happening in spades.

Small trials are already happening the App DataWallet for instance. There is also small movement for decentralised apps or Web 3.0
https://medium.com/@matteozago/why-t...t-a5851d63c949

While it won't be smooth sailing, we are transitioning into a post scarcity society.

[jk]

Re: Anyone watching the emerging markets?

we have to keep in mind triffin's dilemma: reducing the american trade deficit ultimately means giving up the dollar's unique reserve status. that's a big deal, a big change in the global political-economy.

[dcarrigg]

Re: Anyone watching the emerging markets?

it was a loaded question, I was talking about You dcarrigg, will you hoard what you make, because the way AI is going it will be like the mobile phone and augment us all.

AI thrives on data, every human is a data making machine... European Union is a clever institute and have thought of elements of this already I envisage a future were everybody is payed for the data they produce.

The problem in my mind with that idea, techdread, is that the commons are already enclosed. You can't give people the property rights to their data back without destroying every major tech company's theoretical revenue model from Washington to Beijing and back again. Just like you can't give every child born a small plot of God's green earth just for being part of humanity. Ted Turner's kids will inherit 3 states (millions and millions of acres) worth of land all for themselves, and hundreds of millions of hardworking American citizens will never own one lousy handful of dirt. Or look to New Brunswick and Maine and John Malone and the Irving Brothers. In the same vein as you can't undo real estate and property deeds and give "the people" back common land, free for all, you can't undo data privatization. Without that, all those Silicon Valley billionaires are broke. And they would sooner hire and army and line I-5 from end to end with crucifixes than wake up with middle class money tomorrow. And I'm not exaggerating. They will spend trillions with a "T" to prevent the "nationalization" of personal data, if you get my drift. Perhaps techno-communists of the future will fight to liberate it or something, like the early 20th-century communists fought to liberate land and bring back the commons there.

But there's zero chance Uber is paying you for the data you produce. They're literally spending hundreds of millions lobbying in courts to circumvent minimum wage and basic labor protections annually right now just so they can save a few bucks on labor costs. Doesn't sound to me like the type of people in the business of handing out free money. Sounds more like the type who will fight to make sure citizens never ever regain a right to their own data or privacy or whatever you want to call it. And unlike the labor law violations, part of me can't even blame Uber for that one. Taking the data is not against the law. And neither is making money on it. And that's the company's whole reason for existing, so it's hard to blame them for it.

I wonder if in the future Americans will ever look back on Ted Kennedy's early move to give us civil rights for genetic information as unbelievably prescient.

But all that aside, I'm sure all that data has some worth. But I think estimates of that worth today are probably greatly inflated. And machine learning techniques to suss out correlations and actually give computers a little inference rather than just rational deductive power are interesting and more powerful now. But software still can only place it into the theoretical contexts we give it. And we don't even have a solid, mostly-agreed upon theory of mind yet. So we're a long way from anything even approximating real intelligence. Although I don't doubt is possible (and will get easier and easier) to pass turning's test in certain controlled situations--e.g. tricking people to think there's a human on the phone when there's not and applications like that. Although I still think of that as more of a hack than actual intelligence...

[vt]

Re: Anyone watching the emerging markets?

While there are many great advances coming with new technologies this may not be a good one:

https://www.economist.com/sites/defa...602_cna400.jpg

[dcarrigg]

Re: Anyone watching the emerging markets?

This.
I've been thinking about this quite a bit, trying to distill how we possibly got here and where does this all take us.

The deliberate breaking of the inflation cycle from Volker's high interest rate policies in 1981/82, and the subsequent deflationary bust, shifted power from labour. Perhaps permanently? The 1970s era of COLA clauses came to an abrupt end when real interest rates went positive. Those wage increases could no longer be depended upon to be rapidly inflated away.

However, wage rates can be very sticky, even in non-unionized firms. Those industries that thrived in the inflationary 1970s, including the resource/commodity sector, laid off people through repeated "restructuring" but were reluctant to cut wages for those who survived. A whole new vocabulary was invented around that activity of layoffs - "voluntary retirements", downsizing, rightsizing, we know them all. But layoff programs were tentative through the 1980s as those firms still expected the good old days of inflation to return. I had a front row seat during that time and I doubt a single management team in the industry I worked in (hydrocarbon exploration and extraction) ever expected crude oil prices to fall for two full decades - all the way through to the infamous $10-headed-to-$5/bbl "Drowning in Oil" Economist magazine cover in 1999. From my vantage THAT is when the towels finally got thrown in and wages started getting seriously cut in those now "lean-and-mean" companies (that first wage cut for me in 2000 was one factor that prompted me to resign, bail out and go overseas to eventually found my own firm).

I believe during that secular deflationary era the real cost of capital was high and drove the marginal propensity for firms to keep investing in technology to replace labour to improve productivity. I don't think its any accident venture capital and development capital started to move into the tech sector aggressively, and many of the iconic US headquartered global tech companies (Microsoft, Sun Microsystems, Intel, Cisco, Motorola, etc) came of age in the decade of the 1980s. In the 1980s, as it cut staff, my employer went from three Cray supercomputers in a glass house to Sun workstations with more total computing power and software capability on geoscientist's desks in less than three years. Engineering software that could better simulate process conditions led to dramatic optimization and cost reductions in plant and equipment design, and our Houston-based global process engineering group slowly shrank to nothing. I could go on and I know everyone here has their own examples.

Perhaps the "stickiness" and pace of wage adjustments further underpinned the tech investment trend in the 1980s? And perhaps this also seeded the "financialization" of our economies? When real interest rates go positive (and stay that way) and capital becomes expensive and valuable, those who have it make the gains.

I think we really went off the rails because of the unique political make-up of the "Anglo-Saxon" nations (by that I mean essentially North America, the UK and to a lesser degree parts of western Europe, which, like Mexico, is influenced by proximity).

Everywhere else I have lived and traveled in this world politics is one of first gaining political position & power and then using it to enrich oneself. Works that way from the Ruling Family kleptocracys of the Persian Gulf, to the perpetual military governments such as Egypt and the Presidents for Life in Africa and the FSU. Even in China and France, as examples, a groomed political elite maintains a tight grip on the national income through the enormous portions of the economy that are State owned or State controlled, and protected (the same might apply in some ways to the EU bureaucrats in Brussels).

Historically our little part of the world worked exactly the other way around; one got wealthy, usually through productive business success, and used that wealth to exert political influence. I think this ideology was the underpinning of the almost uniquely US/UK/Canadian mass privatizations of State entities during the Reagan/Thatcher/Mulroney era. Like most things, in moderation this might not have been a bad way to run an economy.

But the financialization has long swung to an extreme. Those with capital, and even those just employed in the activity of managing capital (Jamie Dimon comes to mind), amass vast quantities more of it as Central Banks forced a cash supportive deflationary bias (real interest rates stayed positive despite ZIRP/NIRP) while flooding the world with liquidity. To our detriment we now have our own versions of the kleptocrats and Presidents for Life in control of public policy instruments; a rhyming replay of the 19th century corporate robber barons? Productive investment, even in tech, has been replaced with speculations in social media firms, companies masquerading as technology pioneers (e.g Tesla) and huge global inflows into the least productive asset of all - residential property.

I agree with dcarrigg. AI is an over-promoted side-show. And I see no reason it will not further concentrate wealth and power.

In my view the change, if there is one, has to come from whatever political influence our public can achieve. The debate is how do we distribute the national income? We are seeing some small signs of these debates changing things already. Jury's out on how all this plays out, however:


- As reviled as he may be among Democrats, as an outsider looking in, it seems to me that a "Republican" President Trump was elected on a platform of US isolationism and more domestic government intervention. And there is no doubt the USA is getting it.

- The Conservative government in the UK almost got its walking papers, and I think would have if Labour had a more middle-spectrum leader. But Corbyn continues to poll well and some of his ideas to reform UK politics, including "community campaign units" are finding genuine appeal. As with the election of Donald Trump, what once seemed politically inconceivable becomes acceptable with continued unmet expectations.

- In my native Canada that most conservative and "American" of Provinces, Alberta, threw out a 40 year Conservative reign and went completely to the other side of the spectrum, electing an interventionist "socialist" NDP government for the first time in history. Neighbouring British Columbia also now has an even more interventionist NDP government, and the election this coming Thursday in Canada's wealthiest and most populous Province, Ontario, is worth watching. It is shaping up to be a dog fight between the NDP left and the Conservative right as voters appear on the verge of all but annihilating the current middle-of-the-political-spectrum 15 year old Liberal government. An example of how far apart the positions are in a race that is currently polling almost dead even in the popular vote across the Province: "Andrea Horwath wants landlords spanked and renters supported, will bring in a BC-style ‘speculation’ tax and actually legislate rents lower. Doug Ford says he would remove government from the marketplace, reducing regulations to help homebuilders and get rid of the foreign buyers tax."

- Canada's left-leaning national government, "Liberal" in name only, in this past week alone a) announced immediate tariffs (in response to steel and aluminum tariffs announced by Wilbur Ross) against the USA, by far its largest trade partner; b) blocked the acquisition of one of Canada's largest engineering/construction companies by a Chinese SOE; c) committed more than CAN $10 Billlion to first nationalize and then expand a Kinder-Morgan owned oil pipeline.

Can we spell "guaranteed annual income"?

Yeah, the politics part will be certainly be interesting. And that's a sharp analysis. The centrist response so far in the US seems to be to adopt more leftist rhetoric, but neuter the meaning of it to banality. So the DCCC revives the language of the New Deal, offers their Better Deal, but what is the jobs program in it? Even more corporate tax cuts, a trillion dollar infrastructure plan, and a fix for the "skills gap" that economists increasingly say doesn't exist--basically exactly what Trump proposes. So Nancy Pelosi is running on hard anti-Trump and left-rhetoric while actually proposing basically exactly Trump's policies. This was similar to Obama--a stimulus that was half tax-cuts and which starved the Social Security Trust Fund (accounting gimmick or not, it led to lots of schrift about how quick it'd run out)--and a healthcare program "Obamacare" designed by Senator John Chafee (R) and promoted by the Republican Senatorial Campaign Committee as the Republican answer to Hillarycare back in 1993.

Interestingly, Obamacare did come with one or two features people on the left supported. Along with an individual mandate, which was always controversial and which the Right turned against and President Trump has functionally gotten rid of, there was also a corporate mandate. Companies with over 50 employees were supposed to have to provide coverage or receive harsh penalties (for the largest employers it could have added up to thousands per employee per month). Nobody remembers this. Nobody enforces it. Nobody seems to care. So the Walmart workers end up on Medicaid. Colleges that employ thousands still refuse to offer coverage to adjuncts. Hospitals that employ thousands still refuse to offer coverage to nurses' aides. And the burden falls to taxpayers and part time workers, tens of millions of whom still have no coverage. Thing is, that's not all Trump's fault. The Obama administration granted waivers to all these big firms year after year. Just like dragging their feet on position limits in Dodd-Frank, or not prosecuting anyone after the biggest mortgage fraud scam of the century, even when a bit of equalizing language makes its way into law, they simply refuse to enforce the law.

And I think this is at least why everybody is sick of the center. Decades of the Washington Consensus and letting the Davos crowd have the run of the place, we're left with slower growth overall, very little if anything by the way in real wage or compensation gains for most people, and rampant inequality, not just in income and wealth, but in the application of rule of law. In power.

I think you're right, the question is increasingly turning back to how to distribute national income. But in the US, I don't think a guaranteed income would/could ever happen. Too much history here against anything like that. Another idea that's floating around much heavier in Washington these days is a job guarantee. Roosevelt and Truman and Johnson flirted with the idea. But with anything, with this one, the devil's definitely in the details. Someone like Booker who has a history of making his first millions on a shady VC tech company deal for a company that never produced anything--and who dumped half-a-billion of Zuckerberg money with billions more from Gates and Oprah's help into Newark Schools only to anger the entire city and give way to Ras Baraka taking over on a platform of undoing everything Booker has done--this is probably not a guy who really wants a job guarantee to work. But he probably would like to sell something he could market as a job guarantee to get power. Of course, I could be totally wrong, and maybe he deeply believes every American who wants to work should have a job. It's possible. I don't know him personally. But I wouldn't bet on it being a top priorty. And I still think there's a power problem.

(Hint for would-be school reformers: If you're in a broke poor school district with massive unemployment and a high employee-to-student ratio, and you fire all the employees, bring in Ivy League teach-for-america grads working for less than min wage, and privatize the administration, you're going to be firing about half the stable middle class people who live in the districts who worked at those schools. Then when you close and consolidate schools you're going to ask them to find ways to get their kids across town even though they have no job and no car. And the school that served as the community/outreach center for all sorts of other programs gets closed. And the sandwich shop and bodega that relied on school traffic dies. So now they're not going to care if there's a new building or a new computer in it at that point. You broke their neighborhood. And you blew billions of dollars to do it).

So there's another problem, right? One need not assume malice. Could be and probably was that everyone from Booker to Oprah to Gates to Zuckerberg thought they were distributing national income downwards and doing a good thing. But they also insisted on doing it their way, and not through any democratic-institutional channels, normal pre-existing ones or otherwise. And that's a hell of a pickle and a hard pill to swallow. Even if some of the elite want national wealth to be redistributed some, it's going to take more than moving capital around. They also probably have to give up some actual decision-making-power. They probably have to actually listen to the people they want to help and cede some decision-making power to them. And giving up power is much harder than giving up some millions of dollars. Or, put another way, redistributing national power might be much harder than redistributing national wealth at this point.

And that's a tough nut to crack. Much harder to quantify. But there are all sorts of ways that it matters.

Let's get back to tech. Look at all the ways tech firms have redistributed national power to themselves. Just think about payment processing. The money doesn't even pass through employees' hands any more. A key feature now is that they don't even get to touch the till. The money is all collected centrally, then dribbled back out. So unlike a taxi driver, there's no way for an uber driver to take a tip a lot of times. Or even to handle the money briefly, which might be important for one reason or another. This is true for all of the 'gig economy' things. Instead of finding a rental agency that you pay some flat fee for finding a tenant, now AirBnB takes 15% off every night's rent, holds the float for a month, then dribbles back what's left. And if, in the future, they decide to up it to 20%, they will. They are basically totally immune to anti-trust. Some of the jerktech-style things just brazenly break all kinds of public utilities and municipal laws. Almost all of them break labor laws. Another one? Amazon, Priceline, and all the other sites like that use cookies and browsing history to adjust pricing, which is illegal under the Robinson-Patman Act. But hell, Walmart and every Pharmaceutical firm violated the act first, and nobody went after them either, so why would tech worry?

Part--I'd argue the most important part--of the destruction / blurring of the lines (firewalls) between wholesale and retail, commercial and residential, work and home, public and private, journalism and editorial, editorial and advertisement, money and speech, labor and management, employees and independent contractors, and all the rest was a massive power and risk shift. By mixing the wholesale and retail aspects of trade, they confused matters and regulators and functionally got away from having to obey laws that existed for a hundred years. They got around centuries of labor law by simply calling everyone management or independent contractors. If we're all Chiefs and nobody's an Indian, why would we need laws to protect Indians? So nobody earns overtime, everybody's salaried, and if you're a "contractor" making less than minimum wage wearing a uniform and doing assigned routes with assigned technology while being forbidden to contract with competitors, well, then we don't have to pay into your Medicare or Social Security or Unemployment Insurance or Disability, or Worker's Comp, or anything else, and the taxpayers and "contractors" can eat those costs. And if AirBnBs put hotels under and Ubers put taxis under, they are still private, so they still don't have to conform to the Americans with Disabilities Act or the Civil Rights Act. You can ban people by race. You can have zero handicapped accommodations. Because you're not a public facility--you blurred the line and are using your private facility as a public one. Once again, thanks to the blurring of distinctions, power shifts away from the weak and towards the powerful.

It's like somehow, after the WWII generation was mostly gone from the picture, we forgot that those distinctions--although arbitrary and made-up--were very important. They were a careful negotiation about how to treat business and labor and citizens of all backgrounds fairly. And by portraying them as old fashioned and pointless, they knocked these distinctions down, first in culture, then in law enforcement, if not in the actual letter of the law, and so power shifted hard up the income/wealth chain, and risk shifted hard down the income/wealth chain. And even if you get guaranteed incomes and shifts in actual wealth and income after the first distribution, I don't think you're going to solve that basic problem--the decision-making power and authority and risks are still going to be tilted much more heavily in favor of those on top than they were some decades ago, at least in these kinds of ways.

And like I said, Gates can think he's doing good, but he wants control--he wants to do things his way, or at least pick the people who are going to run them and make sure they're run within the confines of his beliefs. After all, it was his money he donated, right? Why shouldn't he have control? And even if he holds weird views that are inconsistent with current evidence--like believing that minimum wage increases lead to disemployment, which was thought to be true for theoretical reasons as recently as the 90s but evidence suggests never was--he's not changing his mind, and so the decisions he makes and the policies he demands will be as fallible as him, and not subject to democratic feedback or even reasoned republican debate of any kind. So he thinks private charter schools run by outside experts for profit are the answer to public schools full of poor-performing students (on tests), and what the actual public in the towns he aims to fix think is of no consequence. Until they vote out his favorite politicians and vote in someone who pulls the plug on the project. But then the easier move is not to reassess your actions and ask what you did to make the public angry for getting billions of dollars infused into their town. The easier move is to assume that either you just didn't market/sell the idea hard enough, or, worse, to assume the public is too stupid to know what's good for them and get jaded.

And what a devil that problem is, right? That even with the best of intentions and the will to put your money where your mouth is, you can still end up screwing things up and doing more harm than good.

So people are casting about for something different. There's not a common diagnosis or prescription, other than a general sense on both left and right that the elite either don't know what they're doing or don't have their best interests at heart--and so a general move away from the status quo and those seen as in the elite--however that's defined in ones mind--seems to be afoot throughout the developed world. Seems as an outsider how the anit-Euro piece fits in too. There's some grasping for local control. A sense that far off players and powers are calling the real shots and john and jane doe aren't even really getting to be privy to the discussion, never mind getting a chance to way in on it.

But this was supposedly another thing about the English-speaking nations of the world, right? They were supposed to be the bastions of distributed ownership, yeomanry, democracy, keeping power checked and all that. But even the most basic lines there are eroding too. At least in the US where we don't have a parliamentary system and take our cue from Montesquieu, it's striking how much blurring there is between branches of government. The presidency has simply taken powers whole-cloth from congress, not the least of which is to declare war. At the state level, they increasingly opt for more and more powerful governors and weaker and weaker legislatures. 44 states now have a line-item-veto, which means the governor basically controls the entire budget process. What's the point of having a representative if they can't represent your little geographic constituency's budget preferences and some arbitrary red line drawn by some statewide official can take them away at will? The lines blur and power concentrates.

Another great example? Boards and executives. The S&P 500 peaked in 2003 at 77% of companies having a dual chairman of the board / CEO. The board sets the CEO's salary. Is it any wonder why CEO salaries rose so fast through all those years where they were also the chairman of the board? The whole structure in theory separates management from policy and oversight, but not when the same person handles both. I mean, an independent board might refuse to cut workers' benefits by $10 million to give the CEO a $10 million raise, but not a board chaired by the CEO, right? That's just kind of obvious. Blur the lines. Consolidate decision-making authority. Shift the power up and the risks down.

So I think a big part of it comes back to the blurring of those lines and the way it weakens and warps the foundation of so many Western institutions we built up through time. I mean, I admit the lines between labor and management or employees and independent contractors or journalists and editorialists or whatever are arbitrary to an extent. But so are the lines between the executive and legislative and judicial branches. The point was to break up power and risk and have clear and defined roles. And I think the inequality in power and risk is probably just as important as the inequality in wealth and income. And I suspect it will probably be a harder nut to crack too. Especially in an age when more and more nations will be interacting with and comparing themselves to other competing giant economies run totally illiberally with no republican institutions, no real separations of powers and massive state-owned-enterprises where political power and wealth are really all one and the same.

[touchring]

Re: Anyone watching the emerging markets?

we have to keep in mind triffin's dilemma: reducing the american trade deficit ultimately means giving up the dollar's unique reserve status. that's a big deal, a big change in the global political-economy.

I think it not necessarily so. A reduction in american trade deficit will strengthen the dollar in my opinion. This world is now a zero sum game. China grows, US stagnates and declines, and vice versa.

The reason is simple, any gain by the US is a loss to other currencies. After years of brain washing by MSM, by bankers and corporations hoping to make a buck by selling to China's one billion consumers, common sense is lost.

Using a hypothetical scenario, if all trade with China stops, Americans have need to give up their fanciful SUV, home improvemewnts, some people will go bankrupt because they can't pay their loans, trillionaires will become billionaires, billionaires will become millionaires. Burger flippers will still earn minimum wage.

But China will have civil and political unrest within 3 years because their factories will go bankrupt, the huge property bubble will burst, and before that happens, Xi will be on his knees at the White house because in China, if you are overthrown, your fate will be like this. It's a life or death game for Xi.

As you can see, Trump now has the upper hand in trade negotiations, but this advantage will not last forever since China is growing by the year. When you have the upper hand, you use it to your full advantage. It's now or never for the US and Dollar.

http://www.scmp.com/week-asia/opinio...-tycoons-belie

In the meantime, this is where China's earnings from exports goes in:

[GRG55]

Re: Anyone watching the emerging markets?

I think it not necessarily so. A reduction in american trade deficit will strengthen the dollar in my opinion. This world is now a zero sum game. China grows, US stagnates and declines, and vice versa...

You have it backwards. A strengthening US$ reduces its trade deficit. The US$ strengthens due to capital flows, not trade flows (which are minuscule in comparison).

The reason is simple, any gain by the US is a loss to other currencies. After years of brain washing by MSM, by bankers and corporations hoping to make a fortune in China, common sense is lost.

Really? In a world where the most manipulated commodity on the face of the planet is Central Bank issued currencies, there is no zero sum game. Neither the money supply, relative exchange rates nor the circulation velocity are static on a global basis. Not by a long shot.

Using a hypothetical scenario, if all trade with China stops, Americans have need to give up their fanciful SUV, home improvemewnts, some people will go bankrupt because they can't pay their loans, trillionaires will become billionaires, billionaires will become millionaires. Burger flippers will still earn minimum wage.

It would be nice if you went beyond these confident projections and provided a cogent case for why they should be.

Here is why I think this may not transpire quite as you describe.

If all trade with China was to abruptly stop the immediate effect would be a rise in goods inflation in the USA, and a drop in incomes for those, relatively small in number, economic sectors dependent on exports to China - agriculture being the most prominent. Once again, the USA is the least dependent of all the world's large, developed economies on exports. And the American exporters are juggernauts. They can take market share away from anybody. Look what they just did to OPEC, and that was BEFORE they again became a crude oil exporter. So substituting for the Chinese market will be shared by many unwilling global participants trying to compete with some of the most efficient, innovative, large-scale producers in the world. Who just had their taxes cut, which reduced their cost structure further.

I seriously doubt it will take the USA much time to substitute for most of the truly critical finished goods it imports from China. And I seriously doubt China currently plays any role whatsoever in providing most Americans with their cherished SUVs. Let's remember, China has built capacity well beyond anything the world needs (and with its ghost cities, well beyond some of the things it needs internally too). And therein lies the vulnerability. Large swaths of China production capacity could be shuttered immediately and, although the world might have to pay a few more bits of printed paper, it will not be short of most of the things it currently buys from China. The ZTE affair is but a foretaste of where this might go.

And from a global perspective this might be the inflationary shot in the ass the global economy needs to achieve what Central Bankers have been unable to achieve after a decade of NIRP/ZIRP and QE.

And please spare us the nonsense about China abruptly selling off US Treasuries. Every time this comes up I keep asking and never get the answer to the question "Who is going to buy them?".

Going to war against the United States, trade or otherwise, is still really, really lousy odds.

But China will have civil and political unrest within 3 years because their factories will go bankrupt, the huge property bubble will burst, and before that happens, Xi will be on his knees at the White house because in China, if you are overthrown, your fate will be like this. It's a life or death game for Xi.

http://www.scmp.com/week-asia/opinio...-tycoons-belie

The link was something about trials for crocs. Seems nothing more than the same actions Mahathir Mohamed, Vladimir Putin and numerous others have taken against actual and potential political rivals. Jailing opposition leaders and oligarchs is nothing new. Corruption in these societies is stamped into the DNA. There's no getting rid of it. What we have here is the corrupt prosecuting the corrupt. Age old story, non?

To your edit regarding the (national GDP?) growth differential, with the possible exception of Brazil, China's first derivative of growth has fallen faster than anywhere else in the world in the past two years. With so much mis-allocated and wasted capital, I truly wonder if China can avoid a deflationary bust analogous to the 1930s Depression when the USA was the up-and-coming global economy.

[GRG55]

Re: Anyone watching the emerging markets?

My, my. Imagine this. The obvious starts to surface. And what just went on in Spain adds to the pressure, as may the populist poll results out of Slovenia today.

https://www.express.co.uk/news/world...lega-five-star


Kick GERMANY out of Eurozone: Italy’s new ministers launch shock attack on Merkel

ITALY’S new coalition has two ministers who unleashed an astonishing attack on Angela Merkel, demanding Germany be forced to quit the euro. Paolo Savona, 81, the anti-euro economist vetoed by President Sergio Mattarella, launched the attack and his views have been backed by newly-appointed finance minister Giovanni Tria, who said he “fully agrees”.

Mr Savona, who has been described as “suicidally anti-German” by former finance minister Ignazio Visco, had previously said that Italy doesn’t necessarily need to exit the eurozone to recover from its long-lasting financial struggles - and instead Germany should.

He explained: “It’s Germany that should ditch the euro because its economy’s growing surplus is not compatible with the fixed change rate regime regulating the eurozone.

“Or, at least, it should accept to move to a system that accepts changes to the rates.”

Mr Tria pledged his support to this position, saying in a comment published on news website Formiche.net that this was a “serious economic analysis and not an outburst coming from anti-euro politicians”...

[Techdread]

Re: Anyone watching the emerging markets?

The problem in my mind with that idea, techdread, is that the commons are already enclosed. You can't give people the property rights to their data back without destroying every major tech company's theoretical revenue model from Washington to Beijing and back again. Just like you can't give every child born a small plot of God's green earth just for being part of humanity. Ted Turner's kids will inherit 3 states (millions and millions of acres) worth of land all for themselves, and hundreds of millions of hardworking American citizens will never own one lousy handful of dirt. Or look to New Brunswick and Maine and John Malone and the Irving Brothers. In the same vein as you can't undo real estate and property deeds and give "the people" back common land, free for all, you can't undo data privatization. Without that, all those Silicon Valley billionaires are broke. And they would sooner hire and army and line I-5 from end to end with crucifixes than wake up with middle class money tomorrow. And I'm not exaggerating. They will spend trillions with a "T" to prevent the "nationalization" of personal data, if you get my drift. Perhaps techno-communists of the future will fight to liberate it or something, like the early 20th-century communists fought to liberate land and bring back the commons there.

But there's zero chance Uber is paying you for the data you produce. They're literally spending hundreds of millions lobbying in courts to circumvent minimum wage and basic labor protections annually right now just so they can save a few bucks on labor costs. Doesn't sound to me like the type of people in the business of handing out free money. Sounds more like the type who will fight to make sure citizens never ever regain a right to their own data or privacy or whatever you want to call it. And unlike the labor law violations, part of me can't even blame Uber for that one. Taking the data is not against the law. And neither is making money on it. And that's the company's whole reason for existing, so it's hard to blame them for it.

I wonder if in the future Americans will ever look back on Ted Kennedy's early move to give us civil rights for genetic information as unbelievably prescient.

But all that aside, I'm sure all that data has some worth. But I think estimates of that worth today are probably greatly inflated. And machine learning techniques to suss out correlations and actually give computers a little inference rather than just rational deductive power are interesting and more powerful now. But software still can only place it into the theoretical contexts we give it. And we don't even have a solid, mostly-agreed upon theory of mind yet. So we're a long way from anything even approximating real intelligence. Although I don't doubt is possible (and will get easier and easier) to pass turning's test in certain controlled situations--e.g. tricking people to think there's a human on the phone when there's not and applications like that. Although I still think of that as more of a hack than actual intelligence...

of course it's a hack that's hence the name Artificial, we did not need a theory of how birds fly to make flight a possibility bernoulli's theorem and some technological advances was what it took. We have the theory of perceptrons and deep neural driving many recent advances, however this is just a part of machine learning, no doubt we will go way past the turing test, a bit like how jets can fly a bit faster then birds.

Your wrong on data, the stuff that is collected from users needs their explicit approval in the EU, there is nothing to stop a company springing up and offering to clean up many data sources and sell it on to the big boys with a cut for the people I think this has been made more inevitable with the Facebook fiasco.

My pessimism is in AI safety, like malware writing any motivated person(s) can get into Artificial Intelligence and run models that were start of the Art a Couple of years ago. Also it's such a fast evolving field mistakes by the big boys could easily be made with very bad consequences.

[GRG55]

Re: Anyone watching the emerging markets?

...Your wrong on data, the stuff that is collected from users needs their explicit approval in the EU, there is nothing to stop a company springing up and offering to clean up many data sources and sell it on to the big boys with a cut for the people I think this has been made more inevitable with the Facebook fiasco.

...

Presumably the reason one gives permission to provide personal data is because you expect to get a benefit from the party to which it is provided. I go to my bank, I have to provide them with a great deal of government mandated information before I am allowed to use their on-line banking capabilities. And even then transactions, both domestic and international are severely limited ("security and anti-money laundering, dontcha know") unless I give them even more transaction specific information. Every time. The bank is certainly not going to pay me for this data. But I have no choice but to provide it ("explicit approval"), unless I wish to attend one of the increadingly scarce teller wickets (as the bank converts to virtual branches, and that option is closed too).

And there is absolutely no way way on earth any EU bureaucrat or legislation can prevent that information from being hacked, disclosed by a disgruntled ex-employee, or through some other voluntary or involuntary system breech. Not a hope in hell.

Landline telephones are apparently "low tech". We have Federal legislation that allows subscribers to opt out of receiving solicitation calls. I've been on the opt out since the phone was installed. There's no way I can stop the ongoing incoming dinner hour computer-dialled calls. I've complained bitterly to the phone company and written to my Federal representative about it. Fine words on paper, no way to enforce it. They can't stop that, they can't stop anything.

Nobody is going to pay you for your data, and there is no recourse when someone unauthorized gets their hands on it and starts using it. The EU minions will figure out their new legislation is utterly hopeless and unenforceable in due course.

[dcarrigg]

Re: Anyone watching the emerging markets?

Presumably the reason one gives permission to provide personal data is because you expect to get a benefit from the party to which it is provided. I go to my bank, I have to provide them with a great deal of government mandated information before I am allowed to use their on-line banking capabilities. And even then transactions, both domestic and international are severely limited ("security and anti-money laundering, dontcha know") unless I give them even more transaction specific information. Every time. The bank is certainly not going to pay me for this data. But I have no choice but to provide it ("explicit approval"), unless I wish to attend one of the increadingly scarce teller wickets (as the bank converts to virtual branches, and that option is closed too).

And there is absolutely no way way on earth any EU bureaucrat or legislation can prevent that information from being hacked, disclosed by a disgruntled ex-employee, or through some other voluntary or involuntary system breech. Not a hope in hell.

Landline telephones are apparently "low tech". We have Federal legislation that allows subscribers to opt out of receiving solicitation calls. I've been on the opt out since the phone was installed. There's no way I can stop the ongoing incoming dinner hour computer-dialled calls. I've complained bitterly to the phone company and written to my Federal representative about it. Fine words on paper, no way to enforce it. They can't stop that, they can't stop anything.

Nobody is going to pay you for your data, and there is no recourse when someone unauthorized gets their hands on it and starts using it. The EU minions will figure out their new legislation is utterly hopeless and unenforceable in due course.

Besides which, when has "specific approval" meant anything other than checking a box next to an unintelligible wall of text one time constituting waiving any rights you had for eternity. The software EULAs made as much of a mockery of contract law as credit card agreements did. The majority of them make extra-legal statements or demands. Nobody reads them. Everyone agrees to them. And everyone knows it's not tantamount to anything approaching true understanding or consent. But it meets the letter of the law, if killing its spirit, so they got you.

The only true way for the EU to have a chance in hell at treating personal data any differently than the US is for them to wall off their systems and their corporations and create their own platforms a la Russia and China. And they're not going to do that. And so long as they don't, they will take what California gives them. And Uber's not going to give a crap about labor laws in Luxembourg any more than it gives a crap about public utilities laws in Rhode Island. It all means nothing to them and they do not care. They will roll out their product anyways.