Machines Making Machines

I have an "old Ipad" that I just noticed yesterday. I bought this "old Ipad" in 2006.

This "old Ipad" was remarkable for its time. You could play music on it of course, and listen to audible books. But, you could also side load movies to it (no wireless then) and watch them on your ipod!

Moreover, you could buy a connection cord, and stream the movie to a T.V. set!

This was cutting edge technology in 2006; five years ago. Today, that ipod is now an iphone and even an ipad, which I am using to write this article. These new digital inventions are light years ahead of that "old" 2006 ipod. These new gadgets now only play movies, but in high definition and with endless capability.

Manufacturing in the United States and in the global economy has seen the same proportional changes.

Today, I read in the N.Y. Times an article that reported on how American corporations are receiving record profits and are NOT hiring people, but rather investing in capital goods (machinery, technology; etc).

The nation is still mired in a possible double dip recession, in spite of the extension of the Bush tax cuts in January and even a payroll tax "holiday". As a result corporations are making record profits, and returning record dividends.

And, they are buying record amounts of new technology and hiring nobody!

And where are the jobs? The jobs are in the robotics, the "new Ipods" that in a sense are doing the work of workers that are "too expensive" to hire.

So two dramatic pieces of economic evidence are present here:

1. Tax cuts and even tax credits (the liberal way of tax cuts), no longer create investment that leads to job creation, in fact they do just the opposite, leading to investment that displaces workers. In a real sense they are now leading to job losses, companies are using the extra income to invest in technology that displaces human labor with machine labor. As one executive remarked, "We cannot compete with foreign cheap labor so we are buying machines to do the work". Machines are cheaper than people.

2. We are witnessing an unbelievable fast adoption of digital automation over analog automaton. Robotics are accelerating in manufacturing at a blistering pace. And, the digital machines that are displacing workers are manufactured in foreign countries adding insult to injury.

Machines are making machines, often never touched by human hands.

That Ipod I bought, for example in 2006, was made in the United States, today it is made in China. Technology now carries the label, "Invented in the USA, Manufactured in China, Vietnam, Japan; you name it. And, less human participation is involved in its production at every level save that of invention.

Many items are produced from inception to shipment, and are never touched by a human being!

So both the conservative remedy to job creation has been permanently discredited, and the liberal remedy to job creation has gone down also. Tax cuts and tax credits actually both ADD to the loss of jobs, not the other way around. Government instilled investment is having he opposite effect that was intended. The stimulus is being invested in machines that make machines.

In a real sense, spurring investment through getting more money to corporations, which was the theme of both Democratic and Republican administrations, is not working, and never will again.

And it is not necessarily working because corporations are greedy and seek to maximize profits. It's not working, because automation, especially digital automation is driving corporations to invest in new equipment and not new people.

And, this is occurring in the global economy as well. To compete globally, ALL manufacturing will automate, and robot "mate" as fast as they can.

Manufacturing by human hands is a dying labor form!

So, what do we do? How do we deal with the massive displacements of millions of workers? Neither political party has a plan for this that I know of!

In futuristic works of fiction, this was supposed to lead to lives of plenty and leisure. People were to be liberated from mind numbing assembly line work and be free to do what they wanted to do.

The reality is much more grim. Most countries, Germany being a big exception, that believe in the free enterprise economy, have simply allowed the unemployed to fester with no real safety net. In the United States we blame the unemployed for their fate.

In the United States, we have the conservatives that actually accuse the unemployed of remaining without work because they want to! Conservatives are actually claiming that people are purposefully staying on unemployment because it is there! Of course, the unemployed are NEVER going back to work in many cases, because the manufacturing jobs, and jobs that were spin offs of manufacturing, are simply gone; Chinese peasants are not doing the work, MACHINES are doing the work.

First, we need to stop the tax cuts, for everyone, right now! The tax cuts are actually accelerating joblessness. Moreover we need to look at Germany and the laws they passed to prepare the millions who are being displaced by the digital, global economy.

We also need to stop the corporate tax breaks and incentives, because they are actually damaging the economy by creating millions of unemployed.

The alternative is a permanent underclass of America and the likelihood of a Republican President in 2012, who will continue the tax cut madness that actually is CAUSING THE UNEMPLOYMENT PROBLEM!

Think about it. How much faster and better is the Ipad compared to the Ipod of 2006? If that kind of speed, power and capability is possible in an Ipod, can you imagine the "progress" that is occurring in robotics, that directly takes workers off the assembly line and is revolutionizing the global economy.

The Industrial Revolution moved millions from the farms to the assembly lines and revolutionized society.

The same kind of revolution is happening now; the problem is there is no place for the displaced to go!

We must adapt to it, change our economic approaches, and begin to protect our fellow citizens who are having their basic economic existence threatened. Otherwise, sooner or later, there will be a revolution of another kind as we are witnessing in the middle east today.

Unemployed middle class Americans, who once had the "good life" will not sit quietly by while their very existence is threatened. They will rise up, in various ways, attack their antagonists that will threaten the status quo and democracy itself.

Roosevelt understood this in 1933 and instead of becoming a dictator (that many urged him to do), decided to change the economic approach of the country through government regulation and leadership. In a real sense, that is our only alternative now.

To leave it to the corporations is crazy, because the corporations are acting in business responsible ways, that throw more people out of work every day.

We need government to lead here, business cannot, because business is simply doing what it needs to do, which is diametrically opposed to the national interest and is feeding the unemployment monster that endangers us all.