Are Those Robots Slacking Off on the Job?

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Much concern is being expressed these days about technological unemployment driven by robotics, artificial intelligence, etc.  But labor productivity numbers have been more in the direction of stagnation than in the direction of a sharp break upwards…see for example this BLS analysis.  Note especially Chart 5, which compares productivity growth in three periods:  1947-2007, 2001-2007, and 2009-2016.

See also this piece, which looks at total factor productivity across continents.

So, what is going on here?  Why have the remarkable innovations and heavy corporate and government investments in technology not had more of a positive effect on productivity?  I have my own ideas, but am curious about what others think.

Tax Reform Impact – Capital Gains and Investment Income

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Recently I was at Powell’s bookstore In Oregon when I came across this book which attempts to be an introduction to the complexities of taxation. I thought that this was in the spirit of what I was going to try to do as I start to review the 2017 Tax Reform act and its’ myriad impacts on the economy and individual incentives.







As an individual investor, I started with looking at capital gains and investment income. Some thoughts:


1. The same general split applies; long term gains are taxed at favorable (lower) rates, and short term gains are taxed as ordinary income. The ordinary income tax brackets are always higher than the capital gains brackets

2. The tax rates for capital gains are 0, 15% and 20%. These are the same as under the previous tax laws.
Here is a brief article from the Motley Fool

3. The rates on ordinary income have gone down a bit, so the average person would pay less on gains, all else being equal (but this gets into your state and the standard deduction, a different topic). Thus there is no significant impact on investments here, it should be slightly favorable

4. Although there was talk of changing the way stock sales are accounted for to limit “tax loss harvesting”, these changes did not occur. I believe that you can still deduct up to $3000 in losses against ordinary income, but I haven’t been able to find that yet to confirm either

5. The 3.8% surtax on gains if your income is above $250,000 remains the same; this does not seem to be impacted by the law

6. While there were changes throughout the code that impacted REITS (real estate limited trusts) and MLP’s (Master Limited Partnerships), these changes didn’t fundamentally impact their value to classes of high income investors (they still have favorable tax characteristics)

7. There was some discussion of eliminating the Federal tax free nature of municipal bonds, but that deduction remained intact

8. There also was some discussion of changing the 401(k) deductions; this too, remained intact


Thus for investors, the basics of investing for individual investors (not the super wealthy) and the impact of taxation did not see significant changes under the new tax law. The types of tactics you would use under the prior tax law mostly moved into the new environment intact.




Cross Posted at LITGM

Bonhoeffer on Stupidity and the Public Sphere

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Dietrich Bonhoeffer, a German theologian who became a leading member of an anti-Nazi conspiracy, wrote the following while he was in prison awaiting execution:

Upon closer observation, it becomes apparent that every strong upsurge of power in the public sphere, be it of a political or a religious nature, infects a large part of humankind with stupidity. … The power of the one needs the stupidity of the other. The process at work here is not that particular human capacities, for instance, the intellect, suddenly atrophy or fail.  Instead, it seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, give up establishing an autonomous position toward the emerging circumstances.  The fact that the stupid person is often stubborn must not blind us to the fact that he is not independent.  In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him. He is under a spell, blinded, misused, and abused in his very being.  Having thus become a mindless tool, the stupid person will also be capable of any evil and at the same time incapable of seeing that it is evil. This is where the danger of diabolical misuse lurks, for it is this that can once and for all destroy human beings.

via Intellectual Takeout

Flyoverphobia

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So, there has always been a tension existing between city folks and country folks; the tale of the city mouse and the country mouse being an example. Then there are all those jokes about the city slicker and the country bumpkin, the effete city dweller and the down-to-earth country folk, the books, movies and television series painting the city as a glamorous yet spiritually and physically unhealthy place, the country being dull, desperately boring, backwards, even a bit dangerous … all in the spirit of good fun, mostly. But now we have a new and malignant version, and there is nothing at all fun about it. Here we have the bicoastal enclaves, all drawn as the glamorous and fabulously wealthy, sensitive and with-it woke folks … and then you have the flyover country in between, filled with as the bicoastal see it with those hateful, stupid looser deplorables, clinging to their guns, and religion, and hating on all those with darker skins.

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Shithole Countries

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Anecdote of a recent conversation:

A: Where are you from?

B: A bad part of Kingston.

A: What part is that?

B: All of it.

Did Trump say “shithole”? It sounds like his typical bombast that enrages people who don’t like him. It also sets a trap for his political opponents by reframing the conversation. The questions whether we should favor immigrants from specific countries and with specific personal qualifications are back in play. Many voters think these questions are important despite the continuing efforts of establishment pols of both parties to stipulate them as beyond the pale. The attempt to conflate the characterizations of countries and of individuals is a rhetorical sleight of hand intended to dismiss doubts about mass-immigration by unskilled people from dysfunctional countries. Ann Althouse nailed this point. The doubts are reasonable — Wouldn’t the French and Germans have been better off heeding such concerns in the recent past? Shutting up people who express such thoughts may be more likely in the long run to lead to an immigration moratorium or other crude measures than to convince the doubters to acquiesce in the admission to the USA of more unvetted young Somali and Central American men.

What Trump was saying, as ordinary people will understand it, is obviously true: We should encourage immigration based on our country’s needs rather than on the needs of prospective immigrants; we should favor people who are likely to be highly productive; and we should attempt to screen out criminals, terrorists and people who are mainly interested in welfare-state subsidies.

There are many talented people in Haiti, but as a country Haiti is troubled and unproductive, which is why so many Haitians want to leave. Perhaps Mia Love is bound to criticize Trump based on Trump’s crudeness of expression and reported disrespectful words, but Trump is right. There were good reasons for Congresswoman Love’s family to leave Haiti for the USA. We are lucky to have them, but that’s not the same thing as saying that we should let in every Haitian who wants to come here. We should be more selective and we should reform our immigration bureaucracy to make things easier for the people we want.

We can expect additional inflammatory stories about Trump’s supposed racism and other character flaws while his negotiations with Congress on immigration continue.