Daily Archives: November 6, 2018

Self-Driving Vehicles: What Will Happen to Truck Drivers?

By Andrew Yang – You would have to have been asleep these past years not to have noticed that manufacturing jobs have been disappearing in large numbers. In 2000 there were still 17.5 million manufacturing workers in the U.S. Then, the numbers fell off a cliff, plummeting to less than 12 million before rebounding slightly starting in 2011.

More than 5 million manufacturing workers lost their jobs after 2000. More than eighty percent of the jobs lost – or 4 million jobs – were due to automation. Men make up 73% of manufacturing workers, so this hit working class men particularly hard. About one in six working-age men in America is now out of the workforce, one of the highest rates among developed countries.

What happened to these 5 million workers? A rosy economist might imagine that they found new manufacturing jobs, or were retrained and reskilled for different jobs, or maybe they moved to another state for greener pastures.

In reality, many of them left the workforce. One Department of Labor survey in 2012 found that 41 percent of displaced manufacturing workers between 2009 and 2011 were either still unemployed or dropped out of the labor market between within three years of losing their jobs.

This is a good indicator of what will occur when truck drivers lose their jobs. Truck drivers’ average age is 49, 94% are male, and they are typically high school graduates. Driving a truck is the most popular job in 29 states – there are 3.5 million truck drivers nationwide. more>

Updates from Chicago Booth

No, America is not more divided than ever before
By Howard R. Gold – It may seem sometimes like the United States is coming apart. “While rural America watches Duck Dynasty and goes fishing and hunting, urban America watches Modern Family and does yoga in the park,” write Chicago Booth’s Marianne Bertrand and Emir Kamenica.

“The economically better-off travel the world and seek out ethnic restaurants in their neighborhoods, while the less well-off don’t own a passport and eat at McDonald’s.” Conservatives, they write, favor masculine names for boys while liberals prefer more-feminine names, and men play video games while women browse Pinterest.

These kinds of cultural splits can have economic, social, and political consequences in that they may ultimately reduce social cohesion within a country. But according to Bertrand and Kamenica, who measured cultural divisions over time, the cultural gap in the US is largely stable—not widening.

The data reveal that divisions definitely exist. Watching certain movies or television shows, reading certain magazines, or buying particular consumer products are predictable markers of traits such as how much money people make or how far they got in school. more>

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Updates from Georgia Tech

Finally, a Robust Fuel Cell that Runs on Methane at Practical Temperatures
By Ben Brumfield – Fuel cells have not been particularly known for their practicality and affordability, but that may have just changed. There’s a new cell that runs on cheap fuel at temperatures comparable to automobile engines and which slashes materials costs.

Though the cell is in the lab, it has high potential to someday electrically power homes and perhaps cars, say the researchers at the Georgia Institute of Technology who led its development. In a new study in the journal Nature Energy the researchers detailed how they reimagined the entire fuel cell with the help of a newly invented fuel catalyst.

The catalyst has dispensed with high-priced hydrogen fuel by making its own out of cheap, readily available methane. And improvements throughout the cell cooled the seething operating temperatures that are customary in methane fuel cells dramatically, a striking engineering accomplishment. more>

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Is The Monetary System Facing The Risk Of Recession?

By Francesc Raventós – The International Monetary Fund, other economic institutions, politicians, experts, and a good number of indicators predict a new economic downturn. The causes will be diverse but the significant one is that debt worldwide has grown at an exaggerated rate.

According to the report of the International Finance Institute, IIF, global debt is $247-plus trillion, 318% of GDP.

In the 2000s or noughties an expansive fiscal and monetary policy with low interest rates generated significant public deficits, a strong increase in borrowing and created a stock market and real estate bubble that erupted in 2007, forcing central banks to push for a huge monetary expansion – Quantitative Easing – to get out of the crisis eventually.

With a lot of financial liquidity in the market at a cost close to zero, the economy has regained growth and, for now, inflation is under control. But the economic cycle cannot be considered closed until central banks’ debt and interest rates return to normal. Trust in the International Monetary System, and the main currencies remains, but if some day trust in one important currency is lost, the situation would be very delicate.

Now the economic recovery has been achieved, it is time to gradually restore debt and interest rates to reasonable levels (aka tapering). The US Federal Reserve (Fed) has already increased its interest rate and announced that it will continue to do so.

The consequences have been immediate, with the withdrawal of investments from emerging countries, such as Argentina, Brazil, South Africa, India or Turkey, to invest in American bonds. The European Central Bank (ECB) has also announced that by the end of 2018 it will stop buying debt and that interest rates will rise as the economy improves (but not before the summer of 2019).

What will be the consequences of tapering?

Will it destabilize the economy?

What are the risks of entering a new recession?

Will the current monetary system resist?

How will the governments that are highly indebted deal with recession? more>