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CP | By Julian Beltrame, The Canadian PressPosted: 02/26/2014 10:33 am EST | Updated: 02/26/2014 3:59 pm EST
OTTAWA – A new paper by researchers at the International Monetary Fund appears to debunk a tenet of conservative economic ideology — that taxing the rich to give to the poor is bad for the economy.
The paper by IMF researchers Jonathan Ostry, Andrew Berg and Charalambos Tsangarides will be applauded by politicians and economists who regard high levels of income inequality as not only a moral stain on society but also economically unsound.
Labelled as the first study to incorporate recently compiled figures comparing pre- and post-tax data from a large number of countries, the authors say there is convincing evidence that lower net inequality is good economics, boosting growth and leading to longer-lasting periods of expansion.
In the most controversial finding, the study concludes that redistributing wealth, largely through taxation, does not significantly impact growth unless the intervention is extreme.
In fact, because redistributing wealth through taxation has the positive impact of reducing inequality, the overall affect on the economy is to boost growth, the researchers conclude.
“We find that higher inequality seems to lower growth. Redistribution, in contrast, has a tiny and statistically insignificant (slightly negative) effect,” the paper states.
“This implies that, rather than a trade-off, the average result across the sample is a win-win situation, in which redistribution has an overall pro-growth effect.”
While the paper is heavy on the economics, there is no mistaking the political implications in the findings.
In Canada, the Liberal party led by Justin Trudeau is set to make supporting the middle class a key plank in the upcoming election and the NDP has also stressed the importance of tackling income inequality.
Stephen Harper’s Conservatives have boasted that tax cuts, particularly deep reductions in corporate taxation, are at least partly responsible for why the Canadian economy outperformed other G7 countries both during and after the 2008-09 recession.
In the Commons on Tuesday, Employment Minister Jason Kenney said the many tax cuts his government has introduced since 2006, including a two-percentage-point trim of the GST, has helped most Canadians.
Speaking on a Statistics Canada report showing net median family wealth had increased by 44.5 per cent since 2005, he added:
“It is no coincidence because, with the more than 160 tax cuts by this government, Canadian families, on average, have seen their after-tax disposable income increase by 10 per cent across all income categories. We are continuing to lead the world on economic growth and opportunity for working families.”
The authors concede that their conclusions tend to contradict some well-accepted orthodoxy, which holds that taxation is a job killer.
But they say that many previous studies failed to make a distinction between pre-tax inequality and post-tax inequality, hence often compared apples to oranges, among other shotcomings.
The data they looked at showed almost no negative impact from redistribution policies and that economies where incomes are more equally distributed tend to grow faster and have growth cycles that last longer.
Meanwhile, they say the data is not crystal clear that even large redistributions have a direct negative impact, although “from history and first principles … after some point redistribution will be destructive of growth.”
Still, they also stop short of saying their conclusions definitively settle the issue, acknowledging that it is a complex area of economic theory with many variables at play and a scarcity of hard data.
Instead, they urge more rigorous study and say their findings “highlight the urgency of this agenda.”
The Washington-based institution released the study Wednesday morning but, perhaps due to the controversial nature of the conclusions, calls it a “staff discussion note” that does “not necessarily” represent the IMF views or policy. It was authorized for distribution by Olivier Blanchard, the IMF’s chief economist.
Posted: 02/26/2014 1:06 pm EST
Canada’s real estate market may be resting on a house of cards, say experts in aReuters poll.
The news agency surveyed 16 housing experts and almost all of them are worried that prices could fall sharply after a decade of rapid growth.
Three said they were “very concerned,” two said they were “concerned” and eight said they were “slightly concerned.” Three said they were not concerned at all.
However, the analysts also didn’t believe that a housing crash would happen any time soon. In fact, prices are expected to rise 2.2 per cent this year, one per cent in 2015 and 0.8 per cent in 2016, Reuters reported.
“Outside of Toronto and Calgary, the housing market is largely cooling, though far from crashing,” Sal Guatieri, senior economist at BMO Capital Markets, told the agency.
Concerns about a housing crash arise amid positive signs for the country’s real estate market. The average price of a Canadian home rose between 1.2 per cent and 3.8 per cent in the fourth quarter of 2013, said a Royal LePage survey.
But the market also remains vulnerable, as prices could fall by as much as 25 per centdue to spiking interest rates or an “economic shock,” a TD Bank report said earlier this month.
However, the report also said that much of the imbalance in the market reflects “frothier conditions in the larger urban centres of Toronto and Vancouver.”
Bank of Canada Governor Stephen Poloz warned in early January that long-term interest rates could rise in response to tapering by the U.S. Federal Reserve, though he also did not appear in any hurry to hike them.
CP | By LuAnn LaSalle, The Canadian PressPosted: 02/26/2014 8:29 am EST | Updated: 02/26/2014 10:59 am EST
MONTREAL – Canadians are still on target for a record year of personal debt despite ending 2013 by making a small dent in the money they owe, says credit monitoring agency TransUnion.
At the end of last year, Canadians owed a total of $27,368 on such things as lines of credit, credit cards and car loans, TransUnion said in a study released Wednesday.
That’s down $117, or 0.42 per cent, from $27,485 in the fourth quarter of 2012 — the highest level of non-mortgage debt on record.
“We’ve been told over and over and over again from so many places that we’ve got to get this debt down and we can’t make it happen,” said Thomas Higgins, TransUnion’s vice-president of analytics and decision services.
TransUnion is sticking by its prediction that average consumer’s total non-mortgage debt will hit an all-time high of $28,853 by the end of 2014.
“There’s nothing to give us any indication that the debt levels are going to start to come down in any noticeable chunk,” Higgins said from Toronto. “Right now, we’re still trending in that direction (to higher debt), for sure.”
Higgins said Canadians started to pile on debt in the years before the 2008 recession. He said he’d have to see Canadians’ personal debt being reduced consistently by $500 to $1,000 over four to six quarters before he would say “we’re sorting of heading somewhere.”
In the last quarter of 2013, consumers’ credit card debt and debt on lines of credit were down a bit, Higgins said.
But consumers spent a little less on holiday shopping only because they got “better deals” rather than consciously cutting spending, he said.
The study also found that loan delinquencies in the quarter ended Dec. 31 were down, meaning that consumers were making minimum payments on their debts.
“We may not be paying all of it, but we’re paying enough down so that you’re still in good standing.”
But Higgins cautioned that if anything impacts the economy, the markets or interest rates, delinquency rates are usually impacted first.
Meanwhile, the study also found that Vancouver residents experienced the biggest increase in consumer debt, hitting $41,077 at the end of last year, up seven per cent from $38,357 in 2012.
On the other hand, those in Montreal managed to reduce their debt by 5.5 per cent from $19,651 to an average of $18,563, the lowest among residents of all major Canadian cities.
Higgins said Vancouver generally has higher incomes allowing consumers to take on more debt, while consumers in Montreal usually save to buy bigger items or pay with debit cards.
In a report on Tuesday, Statistics Canada said Canadian families have become wealthier over the past several years, with net worth rising despite the well-documented growth in household debt and a setback from the recession.
However, there were big differences across age groups, regions and family types and economists noted that the biggest single reason overall for the improvement was rising house prices, which are widely expected to moderate or even fall in the next few years.
CP | By Yuras Karmanau And Maria Danilova, The Associated PressPosted: 02/24/2014 3:46 am EST | Updated: 02/24/2014 8:59 am EST
SIMFEROPOL, Ukraine – Ukraine’s acting government issued a warrant Monday for the arrest of President Viktor Yanukovych, last seen in the pro-Russian Black Sea peninsula of Crimea, accusing him of mass crimes against protesters who stood up for months against his rule.
Calls are mounting in Ukraine to put Yanukovych on trial, after a tumultuous presidency in which he amassed powers, enriched his allies and cracked down on protesters. Anger boiled over last week after snipers attacked protesters in the bloodiest violence in Ukraine’s post-Soviet history.
The turmoil has turned this strategically located country of 46 million inside out over the past few days, raising fears that it could split apart. The parliament speaker is suddenly nominally in charge of a country whose economy is on the brink of default and whose loyalties are torn between Europe and longtime ruler Russia.
Ukraine’s acting interior minister, Arsen Avakhov, said on his official Facebook page Monday that a warrant has been issued for the arrest of Yanukovych and several other officials for the “mass killing of civilians.” At least 82 people, primarily protesters, were killed in clashes in Kyiv last week.
Avakhov says Yanukovych arrived in Crimea on Sunday and relinquished his official security detail then drove off to an unknown location.
After signing an agreement with the opposition to end a conflict that turned deadly, Yanukovych fled the capital for eastern Ukraine. Avakhov said he tried to fly out of Donetsk but was stopped, then went to Crimea.
Tensions have been mounting in Crimea, where pro-Russian protesters raised a Russian flag on a city hall in one town and scuffled with police. Russia maintains a big naval base in the Crimean port of Sevastopol that has tangled relations between the countries for two decades.
Yanukovych set off a wave of protests by shelving an agreement with the EU in November and turning toward Russia, and the movement quickly expanded its grievances to corruption, human rights abuses and calls for Yanukovych’s resignation.
“We must find Yanukovych and put him on trial,” said protester Leonid Shovtak, a 50-year-old farmer from the western Ivano-Frankivsk region who came to Kyiv’s Independence Square to take part in the three-month protest movement. “All the criminals with him should be in prison.”
The speaker of parliament assumed the president’s powers Sunday, even though a presidential aide told the AP on Sunday that Yanukovych plans to stay in power.
The speaker, Oleksandr Turchinov, said top priorities include saving the economy and “returning to the path of European integration,” according to news agencies. The latter phrase is certain to displease Moscow, which wants Ukraine to be part of a customs union that would rival the EU and bolster Russia’s influence. Russia granted Ukraine a $15 billion bailout after Yanukovych backed away from the EU deal.
U.S. Ambassador Geoffrey Pyatt said the U.S. is ready to help Ukraine get aid from the International Monetary Fund.
The European Union, meanwhile, is reviving efforts to strike a deal with Ukraine that could involve billions of euros in economic perks. EU foreign policy chief Catherine Ashton is visiting Kyiv on Monday and Tuesday.
The protest movement has been in large part a fight for the country’s economic future — for better jobs and prosperity.
Ukraine has struggled with corruption, bad government and short-sighted reliance on cheap gas from Russia. Political unrest has pushed up the deficit and sent exchange rates bouncing, and may have pushed the economy back into a recession.
Per capita economic output is only around $7,300, even adjusted for the lower cost of living there, compared to $22,200 in Poland and around $51,700 in the United States. Ukraine ranks 137th worldwide, behind El Salvador, Namibia, and Guyana.
Ukraine has a large potential consumer market, with 46 million people, an educated workforce, and a rich potential export market next door in the EU. It has a significant industrial base and good natural resources, in particular rich farmland.
OTTAWA – Canada’s middle-class is mortgaging its future to stay afloat, making the Canadian dream “a myth more than a reality.”
That’s the blunt assessment of an internal Conservative government report, an unvarnished account of the plight of middle-income families that’s in contrast to the rosier economic picture in this month’s budget.
The document was prepared last October by experts in Employment and Social Development Canada, the department that runs the employment insurance fund and other income-support programs. The Canadian Press obtained the report under the Access to Information Act.
“The wages of middle income workers have stagnated,” it says, referring to the period from 1993 to 2007.
“Middle-income families are increasingly vulnerable to financial shocks.”
The document, drawing on three years of “internal research,” was prepared for the department’s deputy minister, Ian Shugart, shortly before the resumption of Parliament last fall.
“In Canada, political parties are making the middle class a central piece of their agendas,” notes the presentation.
A department spokesman, Jordan Sinclair, said in an email that the research “was not linked to the parliamentary schedule or topics raised within the House of Commons.”
The authors say middle-income families have seen their earnings rise by an average of only 1.7 per cent a year over the 15 years ending 2007.
“The market does not reward middle-income families so well,” says the report. “As a result, they get an increasingly smaller share of the earning’s pie” compared with higher-income families.
Shugart was also told middle-class workers “get lesser government support for their work transitions,” referring to a sharp fall-off in employment-insurance benefits compared with other economic groups.
The analysis stops short of the 2008 global recession, though other analysts have noted the economic crisis wiped out many well-paid manufacturing jobs in central Canada that have supported middle-class prosperity.
The report also refers to debt, saying “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”
“Over the medium term, middle-income Canadians are unlikely to move to higher income brackets, i.e., the ‘Canadian dream’ is a myth more than a reality.”
Current Conservative messaging emphasizes a million new jobs created since the recession; Canada’s relative economic stability compared with other industrialized countries; and various tax cuts provided to “average” families since 2006.
Sinclair repeated those talking points when asked for comment on the report.
“Today, the Canadian economy is remarkably strong, setting the conditions for Canadians and their families to succeed and enjoy a high quality of life,” he said. “Middle-income Canadians receive proportionately greater (tax) relief.”
This month’s budget acknowledged the need to create jobs and provide workplace training, but the budget documents never refer explicitly to the “middle class.” The term “middle income” occurs just three times in the main budget, and once in a news release.
Since becoming Liberal leader in April last year, Justin Trudeau has frequently cited the plight of the middle class, a theme repeated at the party’s weekend convention in Montreal.
Research from the Library of Parliament shows that since Jan. 1, 2013, Trudeau has used the phrase “middle class” 52 times in the House of Commons, compared with twice for Prime Minister Stephen Harper and nine times for NDP Leader Tom Mulcair. None of them used “middle income.”
Toronto Liberal MP Chrystia Freeland commended the public servants who produced the report, saying that for the Liberals “it was like getting a good grade on your homework.”
“This is a very strong, non-partisan, data-driven report, focused on Canada, which confirms our assertion, which is at the centre of our policy, that the middle class in Canada is being squeezed and that we have to do something about it,” she said in an interview from Montreal.
“The public discourse has been lagging — we’ve been in denial.”
Freeland, who won a November byelection and now is the party’s trade critic, is author of the 2012 book Plutocrats, which argues that wealth distribution has favoured the ultra-rich and left everybody else behind.
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AP | Posted: 02/19/2014 4:14 pm EST | Updated: 02/19/2014 11:59 pm EST
WASHINGTON – Not even the U.S. president can save the Keystone XL pipeline project now — at least not by himself.
The long-delayed plan suffered a major setback Wednesday when a Nebraska district judge ripped up a state law that could have forced landowners to allow the pipeline through their property.
The ruling opens up the prospect of more regulatory hurdles, complicated negotiations with landowners, legal fights and fresh delays, regardless of whether or not Barack Obama ever approves the controversial project.
Lancaster County Judge Stephanie Stacy declared unconstitutional a law that had given Nebraska Gov. Dave Heineman the power to push the project through private land.
Unless the law is reinstated by a higher court, Calgary-based pipeline builder TransCanada Corp. could be forced to either draw up a new route or seek permission from every last landowner on the current one.
Additional lawsuits seem almost inevitable in the ongoing fight over a project designed to increase the pipeline capacity for Canadian oil into the U.S. by about one-quarter — a pitched battle that has already lasted for years.
Stacy insisted her ruling had nothing to do with the merits of the pipeline and everything to do with Nebraska’s constitution.
“TransCanada’s Keystone XL pipeline has become a political lightning rod for both supporters and opponents of the pipeline, but the issues before this court have nothing to do with the merits of that pipeline,” she wrote.
“The constitutional issues before this court will not require consideration of the current pipeline debate, nor will the decision in this case resolve that debate.”
State officials who defended the law will appeal to the Nebraska Supreme Court. Nebraska lawmakers may have to pass a new pipeline-siting law to allow the third-party Public Service Commission to act.
If they do, it’s not yet clear how long the five-member commission might take on the issue or whether it would approve the pipeline.
TransCanada, meanwhile, said it was disappointed and disagreed with the decision, but would analyze it before deciding on its next steps.
As it stands, TransCanada has settled with landowners in five of six U.S. states through which the pipeline is supposed to pass, as well as with more than two-thirds of the affected landowners in Nebraska.
But a minority have kept fighting, despite skyrocketing offers of compensation.
Jeanne Crumly and her husband have seen offers for use of their land surge from $8,900 to $61,977.84. But they don’t want the pipeline on their family farm at any price.
Crumly, who lives in the tiny Nebraska town of Page, about 300 kilometres northwest of Omaha, said she had to read the ruling a couple of times to believe it. She made celebratory phone calls to her husband and children once it sank in.
“It felt great,” Crumly said. “There’s some justice and it’s not just money running the show.”
The company had been upping the ante for access to people’s property, presumably to settle all possible disputes in the event Obama approved the pipeline.
TransCanada, which has complained it’s been losing money as the pipeline equipment sits idle, had been hoping to start building during this year’s construction season.
That plan now seems like a distant long shot.
The southern leg of the pipeline is already operational. But oil must still be transported by rail from Alberta through the northern U.S. before it can be sent by pipeline to refineries on the Gulf of Mexico.
The issue came up at a North American leaders’ summit in Mexico, where Prime Minister Stephen Harper pressed Obama to provide some clarity on his intentions.
Officials said Obama’s message remained unchanged: there’s a regulatory process underway, and he doesn’t control it.
There’s a 90-day period during which U.S. government departments can raise concerns about the pipeline, before the State Department makes a final recommendation to the president.
However, administration officials have made it clear that there is no set deadline for either State or the president to make the final call.
Obama did add during a news conference later that he and Harper spoke about the need to work together on dealing with greenhouse-gas emissions.
There is some speculation in Washington that Obama might want to delay the politically sensitive decision until after November’s midterm elections.
Posted: 02/14/2014 5:53 pm EST | Updated: 02/15/2014 1:59 pm EST
At a press conference on Friday, Michael Gravelle had a clear message: Talks between government, industry and First Nations are moving ahead.
“No matter what else happens, we are determined to see the Ring of Fire go forward,” he said.
But there were scant details on the project’s timeline. Development hinges on the success of talks between First Nations and the province over environmental protection, infrastructure, revenue sharing and social assistance.
The province is keen on pushing ahead as it eyes the royalties and jobs that could flow into Ontario’s Far North, where an estimated $60 billion in mineral deposits lie within the 5,000-square-kilometre track of land.
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Transportation to market from the remote location has been one of the key sticking points that has prevented development so far. Gravelle announced Friday that consulting firm Deloitte will help guide a development corporation that will be responsible for infrastructure.
The development corporation was announced months ago, but so far none of the players have committed to it. Gravelle said the province decided to call in a third party because First Nations and miners wanted further examination of the infrastructure question.
Deloitte will act as a neutral third-party adviser in the hopes it will speed agreement on the best way to build a route connecting the region to the Trans-Canada Highway. But Gravelle said it’s unclear whether the firm will provide a conclusion on the best mode of transportation.
One option is a road that would run closer to several isolated First Nations communities near the Ring of Fire and connect to the Trans-Canada Highway. Another option is a road that would cost more to build, but is a more direct route and therefore more cost-effective in the long run. Further options that have been tabled include everything from rail to hovercrafts, Gravelle noted.
The firm will also provide advice on governance and legal issues, as well as timelines for how the corporation, which is still just an idea, would be formed.
Progress so far has been frustratingly slow for some of the miners involved. Global mining giant Cliffs Natural Resources announced late last year that there was too much uncertainty over the project and pulled out. The company called off their $3.3 billion chromite project amid internal struggles with crippling debt and shrinking profits.
Gravelle also said that there has also been “significant progress” toward a regional framework agreement between the province’s chief negotiator Frank Iacobucci and Bob Rae, who is representing the nine First Nations communities who will be most affected by by development in the region.
He expects the province will soon be able to make an announcement that chiefs have signed on to the framework. After that, the talks can move on to more concrete — and potentially more contentious — issues ranging from infrastructure to investments.
However, Gravelle also said he was “disappointed” that the federal budget delivered earlier this week made no mention of the Ring of Fire, despite Ottawa’s recognition of the national economic significance of the project.
“I was surprised, frankly that there was nothing in there about the Ring of Fire,” he said.
The province has consistently called on Ottawa to do more than pay lip service to the importance of the lucrative mining region. Queen’s Park wants the federal government to back up its words with money to help pay for the hundreds of millions in infrastructure the project requires.
Friday’s announcement comes at a challenging time for the mining industry. Commodity prices have plunged, meaning miners are earning less. Weaker profitability means few companies are in the mood to invest in big projects.
When commodity prices were soaring a few years ago, miners were raising capital for new projects faster than they could get regulatory approval. Now, the biggest impediment is financing.
Cliffs announced earlier this week that it would idle production at its Wabush mine in Labrador because it is no longer economically viable. That put 500 people out of work.
Canada’s largest gold miner Barrick Gold, which lost nearly $3 billion in the latest quarter, has not been able to find financing for its Cerro Casale mine. Canadian Zinc is in the same predicament with its Prairie Creek project.
Gravelle said that while the industry is certainly seeing “challenging times,” he is not concerned about its impact on the Ring of Fire because commodity prices are cyclical and development in the region could last for decades.
The lull in investor interest gives the province, First Nations and miners more time to reach an agreement that benefits all.
“While we are keen to move as quickly as we can, we also want to ensure we get it right.”
Conservative MP Blaine Calkins believes the Trudeau Liberals want to take away his firearms.
And to that, the Alberta native says they must pry them from his “cold, dead hands.”
Calkins rose in the House during members’ statements on Monday to highlight that Liberals will debate a resolution at their biennial convention later this month calling on any future Grit governments to reduce the number of firearms in Canada.
And to Calkins, who represents the Alberta riding of Wetaskiwin, that means Liberals already have a “plan to confiscate rifles and shotguns from law-abiding Canadian firearms owners.”
Calkins said Liberals have not moved beyond when former justice minister Allan Rock said only cops and the military should possess firearms.
“If the Liberal leader wants my guns, he can pry them from my cold, dead hands,” he said to great applause.
The reference will remind many of Charlton Heston’s famous speech to the National Rifle Association convention in 2000.
There are more than 160 different policy resolutions that will be debated by Grit delegates at the convention, dealing with everything from democratic reform and drinking water to veterans issues and fracking.
The resolution Calkins referenced, “Fewer Guns, Less Violence,” has been put forward by the Young Liberals of Canada. It says nothing specific about confiscating legal firearms.
WHEREAS evidence demonstrates a clear relationship between the number of firearms in a society and the number of firearm-related homicides and suicides;WHEREAS gun violence in our urban and suburban centres remains a significant threat to public safety;
WHEREAS incidents of firearm-related crimes, deaths and injuries decrease when access to firearms is combined with effective policies that keep firearms out of the hands of those who would use them to for such purposes;
WHEREAS the Australian Conservative government of John Howard successfully reduced the number of firearms in that country through proactive initiatives such as gun buybacks which led to decreases in the rates of firearm-related crimes, homicides and suicides;
BE IT RESOLVED that the primary objective of a Liberal government firearms policy shall be reducing the number of firearms in Canada through initiatives inspired by the Australian model.
The policy proposal has already generated discussion and debate on the Liberal website.
Former Australian Prime Minister John Howard brought in major gun reforms in 1996 after a massacre in which 35 people were killed.
In a column published in The New York Times last year, Howard elaborated on how he worked to ban automatic and semiautomatic weapons and how his government bought back — then destroyed — about 700,000 guns from Australians.
Calkins’ remarks came as Conservative MP Rob Anders faces criticism for posing at a shooting range over the weekend in front of a target that depicts Osama bin Laden.
The chairman of the Muslim Council of Calgary told the Calgary Herald that the image portrays Muslims as terrorists “who should be short or belittled.”
Speaking at the recent Davos economic conference – widely considered to be the elite economic forum to discuss trends and political strategy – an expert in artificial intelligence and machine learning, Jeremy Howard, had some stunning announcements that indicate a major shift in employment is set to occur very soon.
As Howard states in the video below, we have hit a critical threshold where machine intelligence is performing better than even the leading experts in the fields of medicine, science, and banking among others. This has vast ramifications, as this crossover coincides also with the replacement of skilled and non-skilled human labor with robots. Between the two events, people from all economic classes are being threatened with replacement in an unprecedented way. It is being called technological unemployment – a type of permanent unemployment that greatly exacerbates our current recession/depression, because the lost jobs most likely will never return.
Howard asserts that we are about to encounter conditions akin to those that occurred after the Industrial Revolution replaced manufacturing and agricultural workers to a vast degree. That event, in fact, gave rise to the term technological unemployment. Much maligned economist, John Maynard Keynes, was the first to issue dire predictions of a type of extinction level event for unemployment, which we now clearly know never fully took place. However, the new type of automation poses a far greater threat, according to many researchers such as Jeremy Howard. The main reason is simple: this time it is all-encompassing; in other words, everyone can be replaced … permanently.
This has led to predictions such as those made by Professor of Computer Science, Moshe Vardi, when he stated that all human work will be fully outsourced to robots and robotic machine intelligence by 2045. But we need to keep in mind that this is not some sort of overnight switch that gets thrown; it is happening right now, as technology is already killing middle class jobs.
In the video below, Jeremy Howard gives very precise, concrete examples that show just how far machine intelligence has advanced, and the threat that it poses for human productivity and employment.
Particularly interesting is his reference to a map showing which countries are service-based economies, juxtaposed with the fact that America has become 65% based on information technology and processing. Both sets are the jobs slated for direct replacement by machine systems that are in some cases already more efficient, lower cost and more accurate than any human. And, unlike humans, machine learning is exponentially increasing its “intelligence” on a yearly basis. This situation creates a scenario as bad as or potentially much worse than the Industrial Revolution, when after the shift 80% of workers were worse off socio-economically.
Howard’s final graphic is a stunning one that shows a 15-year flat-line, and now downward slide of human value vs. overall productivity. This can only mean one thing: we are already being outsourced, and the pace is accelerating.
Dire predictions aside, there are ways to position oneself for the coming transformation without merging with machines, as Transhumanists suggest, or turning over the running of society to a centralized hive system of political and economic management as Zeitgeist proponents endorse.
For a look at the areas where one can still thrive, please view this essential documentary. It’s long, but the path for the unprepared will be far longer.
Related Article by Eric Blair:
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