Robert Oak — A Detailed Look at the BLS Payrolls Employment Report for June 2013

Bottom line, the employment crisis casts a long shadow for America's workforce and just continues unabated. While with revisions the payrolls report shows much better news, when digging into the details, we find low paying service sector jobs, not the kind which support a healthy middle class. Congress is busy trying to flood the U.S. labor market with more foreign workers via comprehensive immigration reform, more bad trade treaties and draconian budget cuts which will cause more Americans to lose their jobs. For over half a decade this Congress has focused on the wrong things when America is clearly suffering from a lack of good jobs. It is positively despicable to see millions of Americans slip into poverty because they cannot get a decent job and with no policy changes, the terrible conditions for the American worker will continue.

The Economic Populist
A Detailed Look at the BLS Payrolls Employment Report for June 2013
Robert Oak

Obviously, the direct and associated costs of this unnecessary and foolish policy are huge, most of which cannot be recouped and a lot of which will haunt both the economy and the traumatized individuals and families for a lifetime. This is either unconscionable policy (evidence of a broken system) or insanity (a combination of megalomania, narcissism, and sociopathy at the top) and probably a combination of the two.

Sophie Quinton — The Trader Joe's Lesson: How to Pay a Living Wage and Still Make Money in Retail

Companies that invest in higher salaries for low-level employees find success in a competitive market

The Atlantic
The Trader Joe's Lesson: How to Pay a Living Wage and Still Make Money in Retail
Sophie Quinton

Contrast with Wal-Mart's business model: Sam Walton — "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment." — Attributed in Adam L. Penenberg, "Why Google Is Like Wal-Mart", Wired, 21 April 2005 [Source: Wikiquote]

Lars Syll — Paul Romer gets the 2012 Nobel Prize in economics

Must-read.

Congrats to Paul Romer.

Lars P. Syll's Blog
Paul Romer gets the 2012 Nobel Prize in economics
Lars Syll | Professor, Malmo University

The most important understanding here is the difference between diminishing returns in deploying  physical resources and increasing returns in deploying knowledge resources with respect to scalability. Ray Kurzweil develops this in his concept of <a href="http://www.kurzweilai.net/the-law-of-accelerating-returns">accelerating returns</a> 

Also, that which is physically limited and particular is rival, whereas what is not limited physically and is universal is non-rival — unless legislated as rival through intellectual property rights, the current push being toward privatizing new knowledge that can be monetized. This is evoking huge push-back globally and is unlikely to be successful without an extension of imperialism.

This similar to what I have alluded to previously, e.g., Bucky Fuller's distinction between physical and metaphysical resource, the physical being limited and particular, and the second virtually unlimited and universal. The physical is scalable only with significant expenditure of physical energy and transaction cost, whereas the metaphysical is easily scale with low energy requirements and transaction cost. 

Even though rationality is bounded, the boundaries are unknown and, given the present state of human knowledge, unknowable. As Aquinas observed, knowledge is in terms of the mode of knowing of the knower. 

Thus, the question becomes whether it is possible to expand the container of knowledge in addition to the contents. There is reason to believe there is.

 

Daron Acemoglu and James Robinson — Did the Europeans Bring Human Capital To the Americas??

Overall, settler colonies did not start out with favorable human capital endowments. In fact these were most probably higher in Latin America.

By the middle of the 19th century, North America and Australia were far ahead of Latin America in terms of educational attainment and human capital. But this was a consequence of political decisions to allocate resources to education and the incentives their institutions created to acquire human capital.

Read it at Why Nations Fail
Did the Europeans Bring Human Capital?
by Daron Acemoglu, Killian Professor of Economics at MIT, and James Robinson, David Florence Professor of Government at Harvard University

Eric Schmidt's (blithe) answer to the jobs crisis

Yes, he acknowledged, many nations on Earth -- not least the United States -- are mired in a crisis of joblessness.

Technological advances such as automation on the factory floor have rendered millions of jobs obsolete, but they have also created millions of fresh ventures, while freeing workers toiling in antiquated industries to forge careers in higher-value pursuits. This is textbook creative destruction, the force celebrated by Joseph Schumpeter, the Austrian economist who is the intellectual touchstone for Silicon Valley....

...No one ought to blame Google, or any tech company, for job destruction in a moral sense. Automation is as old as capitalism, the natural outgrowth of the human impulse to extract greater harvest with less effort while saving the cost of paying other people to do what one cannot or do not care to do oneself.Labor sidelined by technology is a story not confined to the wealthy world. For Americans, a discussion of lost textile jobs conjures thoughts of laid-off mill workers in the Carolinas, with production shipped to factories in China. But China has lost more jobs in the sector than any nation on Earth -- the direct result of automation.

All of that said, Schmidt too blithely dismissed a problem with no easy answers, one at the center of the populist ferment now seething from Cairo to Columbus. In the United States, he suggested, unemployment is predominantly the result of inadequate skills among the workforce, a problem that could be addressed with better education.

Governments have to do something that's hard," he said. "They have to go back and invest in human capital. There are plenty of companies in the U.S. and other countries I've visited that are very short of highly skilled workers...."

...Yet too few Americans have gained a slice of the spoils, leaving too few able to consume enough to propel the economy. That limits demand for all sorts of workers -- from parking-lot attendants and short-order cooks to tax accountants and architects.

Fixing that will require something that the fabulously wealthy executives now here wandering the snow and cocktail circuit are too prone to oppose: making the tax code more progressive, thus enabling more people to enjoy the wealth derived from innovation.

Read it at The Huffington Post
Eric Schmidt At Davos Praises Globalization, Dismisses Jobs Crisis

by Peter S. Goodman

Eric Schmidt should ask some unemployed "human capital" what it feels like to be creatively destroyed or to be busted down to a minimum wage job.