Good piece, I intend to repost and connect to acamedia and public education and make the link between "Accept When a Market is Finished" and "Pivot before the decline is Obvious" (also, "Track Market Signals Relentlessly") - appreciate the insight!
one of the best read in current mixed economic dynamics.
This is epic-If the market you knew is gone, stop trying to win in it. Find the work that matters now, build for the market that exists, and be ready to move again when it changes.
Excellent analysis, John. I’ve noticed that technological advances throughout history have consistently moved society up Maslow’s Hierarchy of Needs. I expect AI to do the same.
Nevertheless, there are winners _and losers_ from change; the Matthew Effect: "unto those that hath shall be given..." is most predictive for who the winners will be. And those rich-getting-ever-richer are a reliable market for articles preaching the gospel according to economics, particularly Chicago-school and Austrian sects. But after reading a few decades of WSJ, Forbes, etc. one doesn't need to read the article to know what will be said - and not said.
The losses are real commonly devastating and often permanent. While people whose livelihoods are displaced by change usually find *some* other job, often they never again reach subsistence level employment, which, for example, is about $22/hr, full-time to be allowed to sign a lease on the cheapest 5% of apartments anywhere in the Atlanta region. By comparison, Uber drivers make perhaps $17/hr before expenses, or $8/hr after expenses, or $-5 to $5 after risk and expenses. (It's amazing that Uber can be loaned the use of many billions of dollars worth of cars for not just free but actually charging for the privilege of loaning to them - and still loses money. Bet big against robotaxis - they can't do as well as Uber if they have to pay for their own cars, energy and maintenance, and Uber lost money.)
Currently, counting the 2.5% decline in the labor participation rate from 66% in 2007 (3.8% of 66), plus the 4.2% official unemployment rate gives 8% true unemployment. Likely double that are highly underemployed, for a total of nearly 25%. Looking at local income distribution with the latest Atlanta metro area BLS numbers available 9/24:
The landlord cartel, the Georgia Apartment Association, which writes the lease form used by every professional landlord, requires prospective tenants prove gross income of 3.3 times rent to be allowed to sign the lease.
30% of the metro area total population earn enough in wages to afford an $1100/mo. (5th percentile rent) apartment,
70% cannot afford the cheapest apartments,
including 32% of employed people.
So at least 8% + 32% =
> 40% of the employable workforce is at or below subsistence-level earnings.
Let me repeat that:
at least 40% of the employable workforce has earnings below subsistence level!
So on your article: companies and other large organizations will overwhelmingly get rid of employees if they can, the invisible hand of the market won't magically provide some other employment to the specific people who lost their jobs. The techies that got outsourced and replaced 20+ years ago were smarter and better than the new losers: BS artists. If AI is good for anything, it's BSing. And it's better BS, but still BS. And if you took the incompetence and the BS out of management, what's left? A certain schadenfreude for the pointy-haired caste is only natural, these stupid, arrogant ones are the people most responsible for nearly everything wrong with the world today, particularly excluding the people who should be running things.
As I wrote in February:
"The correlation between income and IQ is less than 0.3 overall, and nearly 0.0 for intelligence in the top 10%. Those with top 1% intelligence are more likely to have financial hardship than average people.
This is not because smart people aren't more productive, Schmidt & Oh's 2016 update to Hunter & Schmidt's classic paper (which was perhaps the first meta-analysis) found IQ validity for predicting job performance is 0.67, vs. e.g. 0.0 for experience, 0.2 for education, 0.3 for biography. (Table 1, p.71). IQ is in fact the best single predictor of job performance, but it is not rewarded in the market, costing at least $3T/yr. in lost productivity in the US alone." [$100T-$200T present value.]
Good piece, I intend to repost and connect to acamedia and public education and make the link between "Accept When a Market is Finished" and "Pivot before the decline is Obvious" (also, "Track Market Signals Relentlessly") - appreciate the insight!
Thanks so much. So glad the article resonated for you. Sincerely appreciate the support!
one of the best read in current mixed economic dynamics.
This is epic-If the market you knew is gone, stop trying to win in it. Find the work that matters now, build for the market that exists, and be ready to move again when it changes.
Thank you! Sincerely appreciated. 💯🙏🏼🤓
Excellent analysis, John. I’ve noticed that technological advances throughout history have consistently moved society up Maslow’s Hierarchy of Needs. I expect AI to do the same.
A while back I write an intentionally optimistic view of the future based on what we’ve seen in the past 100 years. If you have the time, I’d love to know your thoughts on it: https://www.linkedin.com/pulse/optimists-view-future-kevin-ertell-osvjc?utm_source=share&utm_medium=member_ios&utm_campaign=share_via.
There are so many dystopian headlines that I wrote it more as a counterpoint than anything, but I’m starting to believe it more and more. :-)
Thanks, Kevin! I’ll take a look!
Nevertheless, there are winners _and losers_ from change; the Matthew Effect: "unto those that hath shall be given..." is most predictive for who the winners will be. And those rich-getting-ever-richer are a reliable market for articles preaching the gospel according to economics, particularly Chicago-school and Austrian sects. But after reading a few decades of WSJ, Forbes, etc. one doesn't need to read the article to know what will be said - and not said.
The losses are real commonly devastating and often permanent. While people whose livelihoods are displaced by change usually find *some* other job, often they never again reach subsistence level employment, which, for example, is about $22/hr, full-time to be allowed to sign a lease on the cheapest 5% of apartments anywhere in the Atlanta region. By comparison, Uber drivers make perhaps $17/hr before expenses, or $8/hr after expenses, or $-5 to $5 after risk and expenses. (It's amazing that Uber can be loaned the use of many billions of dollars worth of cars for not just free but actually charging for the privilege of loaning to them - and still loses money. Bet big against robotaxis - they can't do as well as Uber if they have to pay for their own cars, energy and maintenance, and Uber lost money.)
Currently, counting the 2.5% decline in the labor participation rate from 66% in 2007 (3.8% of 66), plus the 4.2% official unemployment rate gives 8% true unemployment. Likely double that are highly underemployed, for a total of nearly 25%. Looking at local income distribution with the latest Atlanta metro area BLS numbers available 9/24:
The landlord cartel, the Georgia Apartment Association, which writes the lease form used by every professional landlord, requires prospective tenants prove gross income of 3.3 times rent to be allowed to sign the lease.
30% of the metro area total population earn enough in wages to afford an $1100/mo. (5th percentile rent) apartment,
70% cannot afford the cheapest apartments,
including 32% of employed people.
So at least 8% + 32% =
> 40% of the employable workforce is at or below subsistence-level earnings.
Let me repeat that:
at least 40% of the employable workforce has earnings below subsistence level!
So on your article: companies and other large organizations will overwhelmingly get rid of employees if they can, the invisible hand of the market won't magically provide some other employment to the specific people who lost their jobs. The techies that got outsourced and replaced 20+ years ago were smarter and better than the new losers: BS artists. If AI is good for anything, it's BSing. And it's better BS, but still BS. And if you took the incompetence and the BS out of management, what's left? A certain schadenfreude for the pointy-haired caste is only natural, these stupid, arrogant ones are the people most responsible for nearly everything wrong with the world today, particularly excluding the people who should be running things.
As I wrote in February:
"The correlation between income and IQ is less than 0.3 overall, and nearly 0.0 for intelligence in the top 10%. Those with top 1% intelligence are more likely to have financial hardship than average people.
This is not because smart people aren't more productive, Schmidt & Oh's 2016 update to Hunter & Schmidt's classic paper (which was perhaps the first meta-analysis) found IQ validity for predicting job performance is 0.67, vs. e.g. 0.0 for experience, 0.2 for education, 0.3 for biography. (Table 1, p.71). IQ is in fact the best single predictor of job performance, but it is not rewarded in the market, costing at least $3T/yr. in lost productivity in the US alone." [$100T-$200T present value.]