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10:31:10 PM    Google It!.

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Of Robots and Happy Marriages

 

Silicon Valley Part 3

Is the Average American Worker 10 Times More Productive than his Indian Counterpart?

Silly question, you might say.

Do Americans have a corner on high tech and innovation?

I'm reminded that back in the early 1960's when John F. Kennedy proposed the space race with Russia, we were in a fight for the high ground in space as well as in the hearts and minds of the world's population.  Kennedy was also looking at a big spending program that would generate jobs, business and new technologies. There was probably no little hint of nostalgia in President Bush's proposal today to build a manned space base on the moon around 2020.

To jumpstart the program, Bush would add several hundred million dollars a year to NASA's budget over the next 5 years.  To put the proposal in perspective, the administration also announced today that it wants Congress to put roughly three times as much, $1.5 billion, into a program to support marriage --right here on earth.  People will be taught "happy marriage skills"; something we'll have to take the 5th on.

Bush's space program, estimated to ultimately cost hundreds of billions of dollars --in the next guy's budget, of course-- will not really kick in until around the same time that the first baby boomers reach retirement age and start collecting their Social Security and Medicare payments.

For the President, the payback from the space program will come in new technology and savings in future space flights, perhaps in inverse proportion to the ratio of moon to earth gravity.

The proposal coincides somewhat ironically with the unmanned probe on Mars that seems to us to be proving, quite handily, the advantage of having non-manned missions in terms of cost and scientific payback.

Whether there might be a big payback in generating fuels and oxygen from under the moon's surface or not, is hard for anyone to say for sure, so we won't hazard more than a passing sneer.

More sure, however, is the role that robotics will play in the earth's economy over the same period that Bush is planning to build a manned space program.  In order for the advanced economies of Europe, Japan and the US to support all those retirees at the same time their populations diminish to an average 1.8 children per couple, worker productivity will have to increase at the fastest pace in history.  the burden will not only be on governments but also on the pension funds of unions and corporations like General Motors, which is expected to owe about a fourth of the price of every car it produces in pension benefits to its aging work force.

Back when JFK was announcing his space program vision, it could be argued that the American automobile was the best in the world.  My 1965 Impala SS, for example, had a V8 engine that cranked more than 366 HP.  The car had an automatic transmission, power windows, steering and brakes and even included leather bucket seats up front. If I remember correctly, though a bit extravagant, it also cost less than $3,000, or roughly the equivalent of $30 grand today. Comparing that car to the equivalent German, French, British or Japanese car of the day is a little like comparing Arnold Schwarzenegger with DC's Anthony Williams. 

At the time, the US carmakers owned over 98% of the North American market. The union guys who made the cars earned more, say, than the average journalist or high school teacher of the day and got equivalent or better pension, medical and vacation benefits.

There were cracks, of course, in this picture window world that came back to haunt the industry.  For one thing, in order to insure a regular turnover in car sales, the automakers had built in obsolescence.  You could be pretty sure that within three years, that Impala would have already lost its original water and fuel pump, was rotting around the wheel wells and there was a good chance the engine had lost half its punch and was burning oil as the rings and valves lost their efficacy.

Still, though you might have thought so at the time, it wasn't Detroit that ended up dominating the world automobile markets.  Today, of course, Toyota is among the top three US auto producers and Chrysler is owned by a German company.

Miniaturization, automation, remote controls, chip and software based smart functionality are already entering into every phase of modern life from medicine to manufacturing processes.  Japan Inc appears to have taken the lead in a number of these areas.

It seems to us that if the vision thing was based on anything more than short-term political gain, it would have relied on a real assessment of where future productivity gains are going to come from.

The Pollyanna's claim we don't need the same kind of efficiency here in this country as do, say, more homogeneous societies like Japan and Western Europe where language and other societal barriers serve to keep immigrants out. The US will subsidize, so to speak, its declining birth rates with immigrants from Latin America.

Perhaps, that's what Bush really had in mind today, when he put aside all that dough to promote domestic bliss.... more people, fewer robots!     

 

..............

 

Do American's have a natural born right to defy the economic law that says at party's end the piper must be paid?

Perhaps, also a silly question.  We're told that spending causes economic activity that leads to higher incomes that leads to greater taxes and......yes, we all live happily ever after on this planet and beyond.

The American dollar, after all, is accepted as a Reserve Currency held by central banks across the planet as the basis for the economic viability for their own currencies. Since the Second World War, dollars have supplanted gold as the reserve currency of choice.  Since the US government does not back those dollars in any way, there is no cost to printing as many dollars as the world is willing to accept.

Should major countries around the world decide to balance their reserves with something that appears equally or more stable, say the Euro, then the US will have lost its very profitable, favored status franchise.

Watch the price of oil. Producers will not sit around forever seeing the real price fall in Europe, Japan and England while the US tries to jump start its economy by revving up the printing press.  You might see $3 a gallon prices by the summer.  And that would be the same as a de facto revaluation.  Needless to say, it would not make Karl Rove very happy.

rmb

dymaxionweb@verizon.net

Copyright 2003 Richard Mendel-Black All Rights Reserved

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8:39:31 PM    Google It!.

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