May I say I agree 100%.
I’ve had many discussions on this point, and almost nobody wants to talk about it.
Liberals simply assume all problems will be handled by more government control, and conservatives by the market.
But what if the free market commits suicide? It’s worked in the best interests of humanity ever since it emerged just a few centuries ago, but there’s no law of nature it will continue to do so forever.
“Income” is not the real issue. What do low and mid level IQ people do with their lives if they’re superfluous to the real economy? The history of American ghettoes and Indian reservations and British slums does not bode well for the psychological health of people in this condition, even when their material condition is significantly better than that of their ancestors.
This is actually good news. Right now we have a massive group of people simply not working. Some of them are wanting to work, but many don’t. Markets react to things like automation by lowering costs and not just the labor component is involved in these lower costs.
Much of what we used to pay for is now ‘free’ on the Internet. Walmart drove the profit out of five and dimes. Amazon is doing the same thing to Walmart. We all benefit from this. Let’s not be Luddites. Deflation due to productivity gains is the good kind of deflation. The poorest Americans face the highest proportion of their incomes for housing, energy and food in that order.
The true constraint in this picture isn’t lower wages or lower costs, but an unsustainable cost of government. The bank and RE bailouts were actually bailouts of local governments which rely on property taxes to exist. Imagine a permanent 50% reduction in the price of RE.
That would cause a 100% spike in tax rates on property or collapse all the urban centers in the country. It would be the end of government school systems (50-65% of tax bills), not to mention municipal pensions and services. That’s what needs to reset. Instead we’re getting government sponsored reflation in RE prices.
It doesn’t make sense to pay police officers or firemen $100k+ salaries. The same goes for most government workers. The Chicago Transit Authority pays $20 million/mile to lay rail. Private RR companies do it for $2 million/mile. That’s the middleman that needs to real cutting and it is happening and will happen more and more.
Assuming that the number of jobs replaced by automation far outnumber those that are created, there will be a large pool of otherwise employable adults with nothing they have to do.
Liberals have suggested a base stipend that each person receives just for breathing. Those liberals that are a little more enlightened will allow certain individuals that actually work to make more, but of course those individuals and/or the companies they work for will have to be taxed substantially to provide money for the stipends.
But how are the stipends determined? Will citizens of some countries get larger stipends than those in others? Will citizens with children get an equal stipend for each child? Will two married adults living in the same house get less than two single adults living separately? So even if we agree with the stipend idea in theory, the actual working out of it in practice could be rather complicated and controversial.
What about the economics? It seems as if this will necessarily lead to some form of massive state control. If the state is providing the stipends and the state is collecting the taxes to fund the stipends then even if the state allows corporations to innovate as they please, the state will have interposed itself into virtually every financial transaction. Slight changes in the stipends or taxes could lead to wild swings in inflation and deflation. This could get real ugly since politicians rather than economists or corporate execs will have the ultimate say in these financial decisions.
So most everyone will be able to do whatever they wish. Millions will try and become rock stars, world famous artists, actors, celebrity chefs, etc. There will be a vast oversupply of people doing things because they are fun rather than useful. Most of the people who go into those "fun" fields will fail, and fail miserably. I hope they develop and deploy a sufficient number of autonomous psychologists to mop up the shattered dreams of millions of wannabes.
And what about all the people on permanent vacation? How many people can fit in Yosemite on a single day? Or the Grand Canyon? The Appalachian Trail will trade places with the Los Angeles Freeway system in terms of man-miles traveled per day. Bored people tend to become restless.
The only thing I know for sure is that the Neocons will be in favor of makework projects. They will be OK with a system that appears to be like the current system. So people will get to do work that is truly useless, but be lied to by their countries and corporations and led to believe it is vital and cannot be done by robots.
If I am going to live a useless existence I would rather be left to my own devices, but Neocons will know what's best for me and have me digging and filling holes on a daily basis so I won't be roaming about getting into trouble and taking away their preferred tee times.