Don’t blame Obama, it was the ATMs!
As any fan of Star Trek will tell you, we get the word “Sabotage” from the Dutch word for shoe, “Sabot”. In Star Trek VI, we are informed, technophobic workers threw their shoes into the gears of new machines due to their fear of losing their jobs to the new mechanical contraptions.
“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
So, says President Obama, the reason you’re unemployed isn’t because of poor government policy. Blame those pesky automated kiosks. Except for one thing: Advances in technology and efficiency have always led to more jobs in this country in the past.
A short history lesson: Steam engines gave rise to railroads and riverboats and ocean steamers. It became much more efficient to ship much larger quantities of goods than before. Sure, the ships and locomotives were expensive, but they were much more efficient than sail boats, horse-drawn wagons and un-powered barges. Rather than fewer jobs, the nation’s economy actually grew much faster! Some people initially lost their jobs, but the efficiency of transportation made it much cheaper to ship goods, and perishables could be transported further. More money was available to invest in transportation and the industries that used it. The people who were originally displaced eventually found new jobs in transportation, or the moved to another industry. Instead of employing a few thousand people, transportation industries became one of the largest industrial sectors employing millions of people.
Economists call this exchange of industries and growth “Creative Destruction”. President Obama calls it “Scapegoat”.
It happened again with automobiles. Instead of millions of people working to raise, feed and care for horses, millions of people are now employed manufacturing automobiles and their components, in repair shops and building roads, bridges and other transportation structures. Millions of acres of farmland was transferred from feeding livestock to feeding people, or to newly popular suburban homes–the construction of which has also employed millions of Americans. More Americans were now needed to work in the oil industry (which had only recently usurped whaling and whale oil). Then the automobile industry was automated with robots, and people were needed to build and program those robots. So advances in technology keep leading to more new American jobs.
So what’s the difference today? Why are kiosks and Automated Teller Machines and other automated processes suddenly so bad for our national unemployment rate?
The difference between the past and now is that the United States is no longer as desirable a place to invest. It’s not that we’re any less creative or capable. Our inventors and entrepreneurs are just as inventive and entrepreneurial as before. There’s been no change in Americans as “doers”. Far from it: We’re still the most productive economy on Earth, by almost every measure. Rather, our government has enacted so many anti-business policies, from increasing the minimum wage to refusing to enact permanent tax rates to over-regulation of the financial and other business sectors that investors, both foreign and domestic, no longer see the United States as a viable place to invest.
The United States didn’t build itself with its own money, at least not entirely. J.P. Morgan was a British financier, bringing money from wealthy Britons to the United States to invest in various industrial enterprises. Even as our trade deficit has grown since the 1970s, foreign investment back into our businesses and foreign businesses investing in American operations sustained the “loss” of wealth in our consumer economy. America had competitive tax rates compared to the “developed” world, a stable government that respected individual property rights, and relatively little regulation.
Not so today. Laws like the Sarbannes-Oxley Act, the constant threat of increased taxes on income and investments, and costly government programs like Obamacare and Cap & Trade are scaring away foreign investment have scared away domestic investors. Despite the weakened dollar, which would normally encourage foreign capital to invest in America, government policies have stymied investment by both foreign and American investors.
After all, why invest in a country that can “claw-back” contractual payments, simply because politicians couldn’t see the ramifications of their own excesses and it was politically popular to do so?
Creative Destruction drives a growing economy. Some people will lose their jobs over time. Rather than spend trillions of dollars on stimulus programs and entitlements while blaming the advancement of technology for poor economic performance, the President should be focusing on creating an environment where investors want to invest in America.