Running alongside the narrative that rich people are the main reason non-rich people aren't rich people is this notion that computers, robots and republicans undermined the US economy for the past 30 years. Productivity has been called a miracle and computers and robots actually propelled America's economy. The tech boom facilitated the Clinton presidency and powered a stock market rally that helped create a government surplus. Throughout this boom, unemployment rates trended lower until the Great Recession began. Throughout this period, millions of new jobs were created–jobs with higher pay.
The nation's unemployment rate hit 10.4% in January 1983, and in November of that year a company called Microsoft announced a next generation operating system that would provide a graphic user interface (GUI) and multitasking environment for IBM computers. By December of 1999, the unemployment rate was 3.9%. I'm sure what bothers the president is the fact that "more efficient" means more profits for businesses. As for leverage and its impact, the leverage unions had over automakers, airlines and trucking companies killed the golden goose and killed more union jobs than any software program ever could.
I do find it amazing that while promoting racial balance in schools, which will come at the expense of hard working students that didn't grow up in broken homes and punishing successful business people, from a plumber with a couple of trucks and three or four workers, to multinationals forced to horde a couple of trillion in overseas banks, the most tech-savvy president ever sounds like a Luddite. In this instance, Barack Obama hates the player and the game. Well, it's going to get tougher unless America embraces the monster it has unleashed onto the world–automation. It's going to get tougher if we promote mediocrity while beating down innovators and risk-takers.
These days, worker incomes are influenced by the global marketplace since that's where products are sold. This is not unlike the movement led by General Ned Ludd (also known as "king"), whose followers destroyed mechanized looms in an effort to stave off the industrial revolution. Generals, kings nor presidents can stop progress–a great leader gets in front of such change.
I didn't build it to fly but to "circumvent" the establishment.
Howard Hughes' character in film "Tucker: The Man and His Dream"
My favorite story yesterday was the ideas of three modern day thinkers and business leaders to build the biggest airplane in history. Paul Allen, co-founder of Microsoft will put up the cash to bring to life designs created by Burt Rutan and tweaked and powered with know-how from Elon Musk. The idea is to create a plane that can fly into orbit and launch satellites at significantly lower cost. It's the kind of automation that will create jobs and benefit mankind.
The idea obviously brings to mind the Spruce Goose (H-4 Hercules) which made one flight on November 2, 1947. The seaplane was the largest ever built based on wingspan. Because of restrictions on metals during the war, the plane was made of wood (birch not spruce) and cost $23.0 million. Although the plane only flew once, it was considered yet another success for Howard Hughes whose innovations made him the richest man in the world. It's fantastic that one of the world's richest men today is ready to put his money ($200.0 million plus) where his mouth is and make possible what the government has failed at for decades.
There is an interesting twist to the story in that Hughes' company changed ownership before emerging as Hughes Electronics–the world's largest manufacturer of satellites. Mr. Hughes, meet Mr. Allen.
By Carlos Guillen
Earlier today we received a snapshot of employment data, and it appears to be improving as fewer Americans filed first-time claims for unemployment insurance payments last week, continuing an overall down trend, an indication the labor market may be gaining traction. According to the Labor Department, initial claims during the week ended December 10 totaled 366K, which decreased from the 385K revised figure reported for the prior week and landed below the Street's estimate of 390K. This weekly result was the lowest since that reached on May 31, 2008. The four-week moving average of insured unemployment for the week ended December 3 totaled 3,666K, representing a decrease of 5.0K week to week.
Empire State Manufacturing Index
By David Urani
The Empire State manufacturing index came in with a good increase to 9.5 for December from 0.6 in November. The components mostly went favorably as well, with new orders going from negative 2.1 to positive 5.1, shipments rising from 9.4 to 20.9, and employment rising from -3.7 to 2.3. Interestingly, inventories went negative for the sixth month in a row, which may be a sign more production is necessary to rebuild supply.