[Spyro7]

Why is this being upvoted? This article begins with a questionable premise and then descends straight into misinformation.

The problems in the USPS did not begin with email. They began with a highly questionable requirement that the USPS fund a plan to fully cover the estimated future health care costs of all current employees. They are the only government institution required to do this, and it has crippled their ability to remain profitable:

* http://www.plansponsor.com/Post_Office_Says_PreFunding_Retir...

* Read First Few Pages Here -> http://www.uspsoig.gov/foia_files/RARC-WP-10-001.pdf

* http://www.nytimes.com/2011/06/23/us/23postal.html

They have overpaid this fund by billions of dollars, but they are not able to use this money to address their current financial shortcomings.

Somehow the author of this piece is able to extrapolate from the fiscal problems of the USPS to the overall job market. The extrapolation is misguided at best.

There are so many things wrong in this article that I will not take the time to address them all. (Most of Europe was thriving in the Middle Ages? Really? The author needs to define the word thrive.) I just want to say that I find it interesting that there is so much hand-wringing in these comments about jobs being displaced by technology.

In economics, we like to call this creative destruction. Old jobs go away and new jobs take their place. This is a natural process, and their is nothing so magically different about the technological revolution that it will somehow "make jobs obsolete".

Just as The Luddites protested against the loss of jobs brought on by the technological progress of the Industrial Revolution, now some individuals protest against the loss of jobs brought on by the technological progress of the "Technological Revolution". Then, as now, it was all hand-wringing and nail-biting with no serious economic analysis.

The critics say this time is different, this time there will be no new jobs, and we should urge people to find something other to do than working. The critics are wrong. Don't worry people. Employment is here to stay.

Side Note: The author engages in some navel gazing when he says America has all that it needs. I'm not sure if the author has noticed it or not, but there is a such thing as globalization and the global needs for goods and services will increase as developing countries close the ground with developed nations.

This global recession is just another business cycle, eventually the world will have another upswing, and then we will revert to mean again. There is no magic here, just the march of time. I would not put too much stock into those who believe that a single recession merits the reevaluation of the entire modern economic system.

Edit: Trying to trim the size. Eventually, I will learn the art of not making posts into walls of text.

[reader5000]

> The critics say this time is different, this time there will be no new jobs, and we should urge people to find something other to do than working. The critics are wrong. Don't worry people. Employment is here to stay.

I mean this is hand-waving as well. You havent actually provided any substantive counter-argument other than bring up the Luddites.

I think the basic argument that at some point, possibly already past, the productive activity required for basic human survival will be virtually entirely automated and require 0 human labor input. How do we allocate productive output in a society that requires no labor input? The notion of the "job" as described in the article may very well be obsolete.

[mattmanser]

I personally think the much bigger question is how do we allocate the profits.

As it could rapidly go very wrong with a miniscule few controlling the vast majority of the income. And a massive income gap developing.

Kinda like what's already happening...

[rphlx]

That was a risk in the early 80s. It's pretty much an undisputed reality today.

[infinite_vision]

There is this new economic system being proposed to address all these realities of the future with the advancement of automation: http://p2pfoundation.net/Panoply

[anamax]

> The problems in the USPS did not begin with email. They began with a highly questionable requirement that the USPS fund a plan to fully cover the estimated future health care costs of all current employees. They are the only government institution required to do this, and it has crippled their ability to remain profitable:

"fully cover estimated future costs" means that they're the only govt institution that isn't a timebomb of future obligations. When they can't keep up, we know that there's trouble down the line, which is far better than the status quo, which is to wait until all of the assets are gone, leaving nothing but obligations.

In other words

> They began with a highly questionable requirement

this isn't a questionable requirement, it's a sane one. The insanity is that it's unique instead of being universal.

> They have overpaid this fund by billions of dollars, but they are not able to use this money to address their current financial shortcomings.

Yes, current projections say that they're overpaid, but these projections have a way of going horribly wrong.

[Spyro7]

> "means that they're the only govt institution that isn't a timebomb of future obligations"

This was the spirit in which the requirement was enacted. I completely agree with the idea. My problem with this line of reasoning is this:

Why fund the estimated lifetime costs of health care that will not be provided for maybe 40 or so years into the future? Why not fund a moving window of ten or twenty years of obligations instead?

There is a huge opportunity cost associated with stashing such a large amount of money away for this purpose rather than using it for current operating expenses.

> "Yes, current projections say that they're overpaid, but these projections have a way of going horribly wrong."

Indeed, projecting costs for the next half-century is a dangerous thing to do. This is why I question the rationality of handicapping the USPS with the responsibility for funding far-future liabilities based on those projections.

Even if you ignore the opportunity costs of this fund, the inflexibility of the rule as well as the fact that it puts so much faith in projections makes it a highly suspect decision.

[anamax]

> This is why I question the rationality of handicapping the USPS with the responsibility for funding far-future liabilities based on those projections.

You're ignoring the fact that those liabilities are being incurred today. If you can't pay them with current revenues, how are you going to pay them with future revenues that also have to cover the liabilities that you're incurring when you're receiving said future revenues.

I'm sympathetic to the idea that there's no way to properly estimate the NPV of this sort of open-ended liability, but that's an argument for not incurring such a liability. It's not an argument for paying less than your best guess of said NPV.

> Even if you ignore the opportunity costs of this fund,

There is no "opportunity cost" in not paying NPV now.

Suppose that your landlord offered to let you pay each month's rent starting 1 year from now and over the 10 succeeding years. How much should you set aside? The only answer that keeps you solvent is to set aside the NPV of the payment stream for each month's rent payments each and every month.

Do the arithmetic. After each month, you've got a new liability that you're going to owe after you stop receiving any corresponding benefit. At the end of year N+1, you're making payments on N years worth of rent (capped at 10) and those payments will continue for 10 years after you stop renting. (Yes, they'll decrease over time, but since you won't be getting the benefit of whatever you were renting, it's unclear why you're happy paying for it with "new money" that you probably need for replacement digs.)

[anamax]

> Why fund the estimated lifetime costs of health care that will not be provided for maybe 40 or so years into the future? Why not fund a moving window of ten or twenty years of obligations instead?

Because it has incurred those obligations and nothing that happens in the next 10-20 years will make those obligations go away. However, 10-20 years from now, it won't have today's revenue to cover those obligations. In addition, ten years from now it will be incurring additional obligations.

Those obligations have a net present value. If you don't fund them now, you have to fund the remainder later out of future revenues while you're also trying to fund at least part of the obligations that you're incurring then.

Let's assume steady state. If you always fund the net present value of 10-20 years of the obligatations that you incurred in the past and present, you'll eventually end up funding the equivalent of the obligations that you're incurring, but you're behind by the amount that you didn't fund during the ramp. You have to make that up in addition to the equivalent of just funding NPV of what you're incurring.

Do the arithmetic over time - funding the total net present value of future obligations is only sustainable way to handle said obligations.

A pension promise is not like a mortgage - it's just a debt with no collateral; there's no equity to sell if you can't make the payments.

[michaeldhopkins]

The General's office's report said that the projections would have been accurate but for the USPS earning a higher than expected amount of interest on their assets. To recalibrate based on this windfall seems foolish to me.

If you take the view as I do that an institution ought to make choices that will keep it around for hundreds of years, spending money conservatively enough to afford promises made to one's employees becomes a wise choice instead of a suspect decision.

That said, I do agree with the General that the USPS is unnecessarily entangled with the US government, and would be able to adequately fund its defined-benefit obligations without legislation (as private companies do), and also regulate overpayments and underpayments better without relying on the GAO or Congress.

[pradocchia]

Did you read past the introduction? It's being upvoted because it's provocative, it's by Rushkoff, and there is a certain unease about the future that this piece speaks to in a hopeful tone.

It's not a protest against technological change at all. It's someone trying to alert others to possibilities that technological change might have for the human condition, if some lateral movement could be accomplished.

Technological progress, creative destruction and the business cycle are all fine and well, but the transition states (Great Depression, WWI & II, Third World Debt Crisis--take you pick) are not particularly kind to all concerned. There's no rational reason to expect the future to be any kinder, breezy appeals to conventional wisdom notwithstanding.

[shoham]

I think that the title was just to grab your attention. I don't agree with everything in the article, especially the idealization of the Middle (or 'Dark') Ages, but the idea that what kind of work people will do 30-50 years from now, I think will be as great of a shift as from the farm to the factory, or the factory to the office (though probably not as big of a shift as the agricultural revolution!)

I think that the author is making a case that more people will work for themselves since the Renaissance, and perhaps from home since the Industrial Revolution began.

In Rushkoff's defense, he's distinguishing between work and jobs.

[ctdonath]

Rushkoff writes: "What we lack is not employment, but a way of fairly distributing the bounty we have generated through our technologies, and a way of creating meaning in a world that has already produced far too much stuff."

To wit, the discovered it can vote itself largess out of the public treasury. With the lofty assumption the idle will, lacking want, pursue productive meaningful occupation, he fails to observe London-like riots are the more likely outcome.

[shoham]

I think that his argument is flawed, but there's some merit to the idea that what a job means will, should and has shifted.

[bluedanieru]

>he fails to observe London-like riots are the more likely outcome

You're suggesting that the London riots, where income distribution and control of wealth and political process is nearly as skewed as in the US, with all the attendant social ills, where civil rights are an even bigger joke than in America, is the result of social democracy run amok? Do you know what social democracy is?

I don't disagree that many people will not pursue productive work if they're free from want. In fact I suspect most won't. But I fail to see why that makes a difference.

I think the core problem is whether technology will make most people obsolete and, if that happens, what we should do with all the people. What do you do with people who really will not and can not ever contribute back to society what they take from it? We had less of a problem with letting them starve back when there really was work for everyone to do, but that might not be the case for much longer, if indeed it is now.

[GFischer]

"I don't disagree that many people will not pursue productive work if they're free from want. In fact I suspect most won't. But I fail to see why that makes a difference."

The problem is that most of the idle people will have an unsustainable amount of children.

I've sometimes thought that only people demonstrably able to support their children should be helped to do so.

I'm not extremist enough to suggest outright prohibition, China-style, but some kind of discouragement and maybe social stigma, plus education (would it be "indoctrination"?).

[shoham]

"The problem is that most of the idle people will have an unsustainable amount of children."

Madness.

[GFischer]

Could you elaborate? We have a welfare system in Uruguay, and it is an observable fact that people on welfare have more children than people not on welfare.

Whether that is caused by welfare, idleness or other factors should be subject to studies, but that's what I'm talking about.

[wmeredith]

>>I think that the title was just to grab your attention.

Unsupported inaccurate inflammatory content titles are called link bait/spam.

[shoham]

Well, like The New York Post. What do you expect from CNN!?!

[gavanwoolery]

In defense of the article's author, it may sound like blasphemy but he brings up some very good points about job creation.

The problems with the USPS might not have begun with email, but email will probably be what kills it (and the fax machine is doing a pretty good job as well).

Automation is a reality we are going to have to face. At some point, it is going to kill almost every manual labor job in the world, probably within our lifetime (IMHO). What do we do with "unskilled" labor then? As I see it, I think living will probably be more or less "free" in the future. When automation is so great that it can rely only on the earth's basic resources and natural energies, food, utilities, and basic housing will probably be affordable enough for anyone, if not outright free.

[duairc]

> Does anyone here not remember the Industrial Revolution? The creation of the automobile? The switch to trains for long-distance travel? The usage of water or wind to turn mills to make bread? Pick something! This is the progress of civilization.

Civilisation is not axiomatically good. This is one of my favourite critiques of civilisation: http://ranprieur.com/essays/beyondciv.html

[Spyro7]

If you enjoyed reading that, then perhaps you would enjoy reading a book that has come to occupy a treasured space on my shelf:

http://www.amazon.com/Science-Technology-World-History-Intro...

The authors provide an overview of world history through the lens of technological advancement. The chapter on physics is a bit rough, but other than that I think that the book is quite solid. It should be required reading for anyone that wants to have a good overview of the march of human civilization.

Edit: By the way, I did not downvote you, but the likely reason for the downvote is that the individual that you link to does not seem to have the necessary qualifications to provide a strong critique of civilization.

Remember, just because someone writes about a topic does not mean that they are an authority on this topic.

[crux_]

I disagree.

Your belief that "new jobs take their place" will only remains true so long as increases in demand can keep pace with productivity: Sure, there's more demand out there in the developing world, but demand is finite in a way that productivity increases are not.

If we're not turning that particular corner today, we will someday; and from that point forth, there will be an inexorable decline in employment.

What happens then?

[nhughes]

I think there is some inductive logic in here; assuming the future will look like the past simply because previous futures have looked like previous pasts is not entirely reliable.

It's safe to assume that things will generally regress to their mean, but they often don't - stock market movements are way more volatile than they should be, for example.

It's possible that technology will advance far enough to perform all of the mundane but necessary work, leaving us to do something else with our time.

I'm not sure when that will happen or how it will be received, but it would be cool to not have to do things you didn't love just to stay alive.

[netaustin]

So far as I know, the Google Car has not displaced any taxi drivers yet, though the author of the post puts it in the same sentence as EZ Pass.

[wbienek]

No mercy. Let em go out of business. It is a corrupt monopoly. Try to start a competing taxi business. (or tow business) and you'll see you do NOT live in a free market. Again. No mercy. After decades they'll be getting theirs.. (yes I tried once upon a time)

[anatoly]

What happened?

[yummyfajitas]

They are the only government institution required to do this, and it has crippled their ability to remain profitable

The post office may be the only government institution required to do this, but every private institution is required to do it.

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR00004:@@@L&#3...;

Since the post office is supposed to be more or less independent of the government (i.e., profitable all by itself, rather than govt. subsidized), it's quite reasonable to demand that it be subject to the same pension regulations as the private sector.

[Spyro7]

The problem the USPS is having is not about prefunding pensions and pension plans. Their problem is that they are required to fund future employee health care benefits. No other company in America - public or private - is required to do this.

This is a side note, but... By the way, I am actually a frequent reader of your blog, and I really miss your posts on economics. Link for the curious:

http://crazybear.posterous.com/

Good stuff!

[yummyfajitas]

After googling this, you appear to be correct. However, the problem is not that the USPS is required to do this - the problem is that everyone else is not.

There is absolutely no reason to treat pension and non-pension obligations differently, and the fact that we treat the USPS differently than everyone else is not an argument to let the USPS off the hook. Instead, we should force both the public and private sector to properly fun their post employment obligations.

As for the blog, I'm building a startup, and haven't had time to post. I'm planning a post on color measurement soon, however.

[wbienek]

Let em go out of business. Back when I was jobless they never would have gave me a second look even though I could have ( and still can) streamline their business..

No mercy for stupidity, inefficiency and incompetence..