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Getting to the George Jetson Economy

Unemployment remains high (reported at 9.6% today but everyone knows it's really higher than 10%), and government action has not built the confidence (Economic Crisis Is Largely a Problem of Confidence) required for recovery.  The Fed is prepared to embark on QE2, albeit a couple years late and trillions short to the party IMO (Let's Just Say It: Print More Money).  Consensus is lacking.

As we consider these gyrations of central planners and central bankers, perhaps we should consider the most difficult challenge any leader faces- predicting the future.  Leadership is about trust, and as anyone who's seen the Poseidon Adventure knows, knowing what you're talking about is critical.  But there's wide disparity of vision.

If we go back nearly half a century, there used to be a more common view of the future.  It could be found Sunday evenings (a popular primetime cartoon, futurism at work).  The Jetsons- George, Jane, Judy, Elroy, Astro- gave a glimpse of their heavily automated, comfortable utopia of 2062, as prescient as HG Wells (anyone else worried about kids becoming Morlock progenitors with their late nights and bad eating habits?) but more inspirational.

But there are a few facets of the George Jetson Economy worth considering.  First, George only worked 9 hours a week pushing a keyboard, except when he took a part-time taxi driver job.  Second, Judy didn't work, but delved into history, art, and homemaking.  Third, the children were focused on education and having fun.  Fourth, there was little work on basic needs other than fixing the automation, and there was lots of automation.  Fifth, what work was done revolved around new technologies and new products, although home decor was sparse (albeit with large thin panel displays).

So, how do we move towards this utopia?  A flying car would be a nice start, and since these have been invented, the next challenge is clearing the skies.  Home robots would be nice- they've been invented as well.  And instant food- well, that's been invented as well.

The trip to the Jetson economy will be enabled by technology, prosperity, and adjustment.  Technology builds on itself, but most breakthroughs are enabled by wealthy customers.  Consider mobile phones, MRIs, flying to vacation, indoor toilets.  These were very expensive propositions to start, but eventually cost decreased to the point these became widespread and necessities.  Robots, flying cars, space travel, 3D televisions, artificial organs could be the same, initially for wealthy customers and then more broadly as inputs (including labor) are commoditized, reducing the price.  And then we must move on to the next thing.

The question for leadership in trying to channel what we move on to has been "what are we running out of"?  And here is where understanding reality comes into play.  The best system for making this determination is market pricing.  So it is critical that accurate price signals reach consumers and investors.  Central planners love fixing, regulating, subsidizing, and otherwise meddling with prices.  The worst example is when the Fed inverts the yield curve, artificially raising short term rates above long terms rates and creating recession (google it if you don't believe me), but oil prices, labor prices, and house prices come to mind.

The benefit of price signals is it then stimulates investment where most needed.  Instead of building more roads, perhaps more bandwidth for home offices, or a ride-share app, or more car services are needed.  Instead of more windmills in the US, perhaps more coal plants in the third world (where three billion people still live on less than $2 a day and development is sorely needed).  Instead of higher taxes on US companies doing business overseas, perhaps lower taxes to encourage sharing of expertise.  And instead of higher-paying jobs in a shrinking healthcare sector, perhaps a booming healthcare sector with lower-paying jobs.

I don't claim to know the market price for entry level labor, but I'm pretty sure it's less than the current levels.  This can be solved with inflation and/or deregulation.  Without it, more workers will be sidelined- not even getting George Jetson's 9 hours a week- and economic production and prosperity will suffer.  In addition, new economic directions must advance to absorb labor, many of them driven by the wealthy.

The question of what the George Jetson economy will look like- and when it will arrive- is an interesting one because technology will not stop.  And, current bump in the road aside, prosperity will advance as well as mankind harvests more natural resources and learns to use them more efficiently.  A quick google search brought up a couple other views of the Jetson economy as well:

I'm reminded of an old saying: "Without vision the people perish".  There are alternative visions vying for success, and since success is when preparation meets opportunity, preparation abounds.  The real opportunities await.

Disclosure: No positions