Do You Want to Be A Farmer?

I have zero desire to be  a farmer.  But that would seem to be the logical end result if we take Obama's recent statement to its logical conclusion.  He said in his Kansas "OK, I really am a socialist after all" speech:

Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper. Steel mills that needed 100—or 1,000 employees are now able to do the same work with 100 employees, so layoffs too often became permanent, not just a temporary part of the business cycle. And these changes didn’t just affect blue-collar workers. If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs and the Internet.

As has been pointed out by economists everywhere since the speech, Obama is fighting against the very roots of wealth creation and growth and our economy.  Productivity improvement has always been the main engine of a better life for Americans, but here Obama is decrying it.

This reduction in employment in major industries due to productivity is not new.  It began with the agriculture.  Check this out from the always awesome Mark Perry

This is exactly what Obama is criticizing.  Without productivity improvements of the type Obama seems to hate, nine out of ten of you would be laboring in a field rather than reading this on the Internet.   Are you poorer because you don't have to grow your own food?  Of course not.   Every time we increase productivity in a major industry, we fee up labor for the next big thing.  We couldn't have had the steel or auto or oil industries if agricultural productivity improvements had not feed up labor for them.  The computer revolution would be impossible if we all were working in steel mills.

PS- of course this does not work if the next big thing, say domestic gas productions through fracking, is blocked by the government and private investment capital is diverted by the government to cronies with a solar panel factory.

  • Mark

    One of the sillier things not discussed is how many jobs are created with Internet, and ATM. Yeah, there may be fewer teller (though to me is seems like there is a similar amount) but at the same time we have many more ATMs put up, than we ever lost in tellers, and these machines all need to be serviced every day - some more. So we got new jobs in ATM maintenance. Believe it or not even your bank branch probably contracts out the service of the ATM machines at the branch.

  • a leap at the wheel

    Also, he's just wrong about the number of tellers vs ATMs. They appear to be complementary, not competing, goods.

    http://politicalcalculations.blogspot.com/2011/06/trends-in-number-of-bank-tellers-and.html

  • Orion

    Don't forget the farmers who put the hunters out of work. I mean jeez, when we were hunters and gatherers we had 100% employment.

  • http://wobbly.com bc

    I knew there was something about OWS that didn't grab me. I'm the 1.7%.

  • JSmoke

    But I don't really think labor shortages are slowing down any innovations with 6,840,507,000 people on the planet. There's always cheap labor somewhere in the world. I would say there must be plenty of available hands around the world.

  • Mark

    With "Internet" I can't tell you how many jobs are ignored to make the claim. Yeah, postal workers are being laid off. But shoot in 1975, how many sys admins, web designers, app designers existed?

    And I personally work on an embedded product with 30 years ago pretty much ran by itself with hardware - but now we want so much info, that I code for a controller box which basically monitors and tries to detect 700 different possible errors which can occur. 1975 just hardware guys were required. Today, all the hardware guys, and scads of software engineers - no-one got laid off, we added to the industry.

    Look at cars. 1975, you probably had a radio, today the electronics and computer controls are incredible, and none of those cost a job - it increased jobs, because we demand more precise climate controls, detailed info about our radio and programing, trip computers, GPS ...

    etc etc etc

  • caseyboy

    Great points, but I'm thinking of going back to the farm. The ability to grow my own food and barter for other items is becoming more appealing as I consider the fiscal and monetary policies of the world. I'm already a reasonable hunter and fisherman.

    Obama has no clue how an economy functions. God Help Us.

  • http://pmoffitt52@gmail.com Patrick Moffitt

    Perhaps the best predictor for poverty is a country having more than 20% of its labor consumed by food production. (The US a food exporting nation has less than 1% of its population growing food)

    What every politician should know- "Most people have a sentimental and false notion of what rural life was like in the past. But the truth is, it was a brutal life where people worked long and hard and typically died young." Thomas Isern, Professor of History at Emporia State University.

  • Ted Rado

    The invention of the cotton gin was lambasteed because it would put a lot of people out of work. Every invention which increases productivity increases our standard of living. In the short term it may cause unemployment.

    However, in the global economy everyone overseas is a competitor. The reason we can pay high wages is because we have higher productivity. This is due to investment in complex machines and processes and a more skilled work force. As the more backward countries strive to catch up, we must improve our productivity to stay ahead and earn higher wages.

    Many feel that, as Americans, we are entitled to high wages. High wages are the dependent variable, not the independent variable. They are the result solely of higher productivity. Efforts to make wages higher than can be supported vis a vis foreign competition only results in uneconomic factories and hence unemployment. In this regard, unions are their own worst enemy. They should be working with management to increase productivity rather than demanding unsustainable wages and benefits and promoting featherbedding.

  • dm

    Describing a problem, as Obama does, does not commit one to the most stupid solution to the problem.

    As Ted Rado says, increased productivity should have lead to increased wages. It hasn't since the late 1970s --- productivity has increased by 80% since 1980, but median compensation has changed by only 8% (see http://twitpic.com/78cfyx/full ).

    Basically, if workers were receiving the same proportion of their productivity that they did in the 1970s, they'd have about $10,000 more a year. Much of that money would go to improving their standard of living. Also note that much of it would go to creating demand for goods and services that would be met by the neighbors who were made redundant by the increased productivity --- neighbors who left old jobs and found new ones.

    Now, like Obama, I'm describing a situation (one that I do view as a problem). I'm not sure what the solution is.

  • dm
  • Not Sure

    "Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper."

    When politicians make this argument, they never seem to include government regulations as part of the reason for jobs shifting from one location to another.

    I wonder why not.

    "Most people have a sentimental and false notion of what rural life was like in the past."

    I rented a house on a farm for a number of years. I didn't work on it but I had plenty of opportunity to watch the guy who did, and I'm here to tell you anyone who idealizes farming doesn't know the first thing about it.

  • Douglas2

    dm's New York Times links are as interesting for what is left out. I had thought it was pretty much established wisdom that the increase in housing costs relative to income during the 1970s and early 1980s led to a vast increase in the number of households having more than one individual in the labor force.
    I think if one could control for the decline of the nuclear family over the same time period one would find that household income remained constant while household productivity decreased -- an unintended side effect of the 1974 Fair Credit Housing Act and banks being prohibited from discounting the female spouse's income in load qualification.

  • marco73

    Most of my ancestors 100 years ago were farmers. and they died in their 40's and 50's, worn out from hard manual labor 7 days a week.
    My grandfather worked in a tractor factory, and had a pretty good lifestyle, but he had buddies like "lefty", "stumpy" and "2-finger Mike". Guess how a factory worker got such a nickname. My grandfather died in his 60's.
    My father worked in law enforcement then as a small business owner, retired, and is still going strong at 74.
    I drive a keyboard and a mouse. My jobs in the computer industry just didn't exist 50 years ago. Who knows what jobs will exist 50 years from now.
    Obama and similar Luddites think that we've achieved everything that we can, and now we have to stop innovation because someone might lose their job while the economy transitions. Please Mr President, lead, follow, or just get out of the way.

  • dm

    marco73: No, that's not what Obama thinks. Go read the speech and see for yourself: (http://articles.latimes.com/2011/dec/06/news/la-pn-text-obama-speech-kansas-20111206)

    "It's not a view that we should somehow turn back technology or put up walls around America. It's not a view that says we should punish profit or success or pretend that government knows how to fix all of society's problems. It is a view that says in America we are greater together -- when everyone engages in fair play and everybody gets a fair shot and everybody does their fair share....

    "The race we want to win, the race we can win is a race to the top -- the race for good jobs that pay well and offer middle-class security. Businesses will create those jobs in countries with the highest-skilled, highest-educated workers, the most advanced transportation and communication, the strongest commitment to research and technology.

    "The world is shifting to an innovation economy and nobody does innovation better than America. Nobody does it better. No one has better colleges. Nobody has better universities. Nobody has a greater diversity of talent and ingenuity. No one's workers or entrepreneurs are more driven or more daring. The things that have always been our strengths match up perfectly with the demands of the moment."

    Does that sound like a Luddite to you?

  • Ted Rado

    dm:

    Obama's speeches sure don't match his actions. He is described as the most anti-business president in history. He has made clear that he wants wealth redistribution. Anyone who is rich as a result of hard work and enterprise is a horrible one percenter. I guess failure and poverty are virtues.

    Much of the plethora of regulations swamping business stem from efforts to give everyone a fair playing field. The result seems rather to be throwing obstructions in the path of business and industry. The proposed pipeline from Canada to Texas is an example of the problem. For many decades, pipelines have been built all over the US with a minimum of problems. All of a sudden, building a new one is like dragging an elephant through a knothole. The Obama administration seems to feel that plain letting an industry do its job is a no-no. The Canadians are threatening to build a pipeline th their west coast and exporting the oil to China. How idiotic can we get?

    What the USG should be doing is greasing the skids for businessmen to do their jobs rather than playing obstructionist. As expected, the enviroloonies have chimed in with their "let's stop all industrial projects" nonsense. They seem to have Obama in their pocket.

  • Mark

    @Dm I always hear about these comparisons to the 70's and how our living standard has not kept up - and many of these comments are written on cheap computer devices which could not be fit in a building in the 1970's using wireless technology which did not exist.

    We basically have stuff today that would look like magic to someone in the 70's. Smart phones are an a good example. My TV btw, is 42" and cost me less than it cost to get the 23 color tv in the 70's considering inflation, that 23 incher was about 5 - 6 thousand dollars today and it had crap resolution.

    Then there is the car. The cheep car in the 70's was the VW bug, or Pinto. Look at the basic Ford Focus, or Fiesta today - for a similar price you get 16" rims with 195 cm width tires vs 13" 155 back then. YOu have a 150hp engine vs 60 back then, you have an all electric cabin - back then radios were optional. Air conditioning today then none.

    And speaking of air conditioning, IN the 70's very few houses had it, even in hot areas. Today most homes have it. And the average home square footage has increased 50%

    Today in the supermarket I get food at reasonable prices from all over the world. IN the 70's it only came in season, and trying to get food from Europe was rather hard ...

    And yet with all this stuff, and everything being fancier at the same level, somehow we these stats are suppose to show we have not kept up with our parents and are living a lower class lifestyle than in the 70's . It doesn't make sense to me, as I walk around with my neigbors all carrying a supercomputer (by 70's standards) in our pockets.

  • marco73

    @dm:
    No, Obama doesn't sound like a Luddite. He just governs like one.

  • dm

    Ted Rado: "He is described as the most anti-business president in history." Yes, by people who "are described as" not knowing what they are talking about. Describing someone is easy. Checking the facts is harder, and they don't always match up with the descriptions.

    Take this exchange here, which can be "described as": "Oh look, Obama describes a problem, the logical conclusion is that he wants the most stupid solution to that problem I can think of". Instead of engaging in mind-reading, why not look and see what he says he wants? If you go see what solutions he actually proposes, they're very different --- basically, these changes are inevitable, so it might be good to find ways to help people find their way through the inevitable transitions between jobs that happen as a result of innovation and productivity increases, instead of leaving them by the side of the road to fend for themselves or become a burden on society.

  • Mark

    @dm

    OK who was more anti-business in your lifetime and why?

    Gosh I would think I have to go back to Nixon to come up with someone even close.

    There was an article yesterday how the Obama admin operatives have introduced trillions in regulation, much more than even his fellow dems Carter and Clinton. Seems like a really poor time to increase regulatory burden when we are already on the ropes. Usually you wait for the good times, when taking the hit won't be noticed as much.

  • marco73

    @dm
    I think Ted's example of the XL pipeline non-decision could be described as anti-business.

    There are links galore to how much oil it could transport, that the oil would flow from a friendly nation, how many workers could be employed, the environmental and NIMBY arguments, and if there would or would not be any impact on AGW.

    I'll ignore all that to just point up one glaring problem with the non-decision: uncertainty kills projects just as surely as a No decision. There are managers, workers, and capital all in place to get going on the XL pipeline, and the longer the decision is delayed, the greater chance that the best managers and workers will venture off to other projects, and the cost of the capital may increase.

    Just look at how the delays to restart oil drilling and exploration in the Gulf of Mexico have allowed the best workers and machines to move off to other projects, delaying potential action to increase Gulf oil production. The delays were from various government officials who introduced uncertainty into the permitting process.

    The Obama administration could be best described as the Uncertainty administration. Businesses can only stand so much uncertainty before they just decide that the decision is No, and go off to other pursuits.

  • Noumenon

    Hey dm, thanks for the good comments.

  • caseyboy

    dm, the private sector productivity is being sucked up by the unproductive pursuits of our gub'mint. You can't waste trillions in capital and expect the free market to drive up personal income. Get real.

  • Scott M

    What Obama is really pushing for here is a European-style guaranteed job. You would have that job even if productivity increases due to technology would normally replace your job.
    And through expended government work he gets more workers embracing this dream -
    I never really understood this thinking until I went to work for the State as a contractor (the economy is doing poorly, but State growth projects are booming!). The State workers that I work with don't work very hard, leave at 4:30 (inevitably right in the middle of a meeting), don't work overtime, and can't be fired for virtually any reason. If they are downsized they have the right to be hired for another state job over a private sector person, even if they are not well qualified.
    They skate by, albeit at a state salary that I could not live on, and retire with the state retirement benefits. Some have even come back to work on my project as contractors while keeping their monthly retirement payout.
    Very few of them keep their skills up to date. And since they can't be fired, poor communication skills and petulant behavior is rewarded, or at least not corrected by serious performance reviews (this is what I hate the most).

  • Benjamin Cole

    There is no more mollycoddled, knock-kneed, enfeebled, pink and subsidized economy in the world than America's rural industries. Roads, trains, water systems, power systems, postal service, airports, telephone service, crops, watersheds---all federally subsidized.

    Rural states generally pay less to the federal government that they get back, while industrial states pay more than they get back. Rural states are the cause of our federal deficit.

    I would like a constitutionally balanced federal budget---and an amendment that every state get back roughly what it pays in. Parity.

    No GOP'ers will ever support that. They love the lard.

  • Ted Rado

    dm:

    Obama has clearly stated that he is in favor of wealth redistribution. There are any number of his actions that clearly show his enthusiasm for a European style controlled economy. He apparently has an antipathy toward business and industry.

    Nobody wants people to starve or be out in the street and sick. The problem is that noone has figured out how to do that without creating all sorts of irresponsible behavior. Girls have babies out of wedlock, workers get themselves fired to get unemployment. At the higher level (the 1% so much maligned), every new law or reg creates an industry of lawyers and accountants figuring out how to skim the system. Virtually ALL of the DOE supported alternative energy programs are frauds to get USG money. The bottom line: noone has figured out how to deal with human nature. Thus, more USG programs, laws and regs are counterproductive. They cost a fortune to administer and challenge people to figure out how to beat the system. As a tribute to human ingenuity, many do indeed do.

  • Smock Puppet, Frequent Fantasy Flyer

    I've been pointing this whole ag job vs. mfr job vs IP&S job for about a decade now.

  • Smock Puppet, Frequent Fantasy Flyer

    >>> (The US a food exporting nation has less than 1% of its population growing food)

    ... and we'd be exporting a hell of a lot more if it weren't for the ethanol boondoggle

  • Smock Puppet, Frequent Fantasy Flyer

    >>> As Ted Rado says, increased productivity should have lead to increased wages. It hasn’t since the late 1970s — productivity has increased by 80% since 1980, but median compensation has changed by only 8% (see http://twitpic.com/78cfyx/full ).

    This is a generic apples-to-oranges crock that Carpe Diem has eviscerated time and again.

    Among other things, it ignores that the cost of many things has plummeted in that same time frame, so the number of hours you have to work for basic living has dropped massively -- food, housing, and transportation are a fraction of what they were (the primary thing keeping the cost of autos so high is that we keep demanding more and more of them -- vastly increased fuel efficiency, much better safety features, more gew gaws -- you have only an AM radio in your auto these days?). Similarly with regard to housing, which is generally much fancier and larger than it was 50 years ago.

    Further, the numbers as-given are based on very different populations with different age variations and very different needs/wants/expectations. So it's another example of lying with statistics, much like the ludicrous new "poverty" and "poor" statistics which derive their definitions from income differences and not the capacity to meet the basic needs for living. Many people "in poverty" these days live better than kings throughout most of history. "Boo ephing Hoo" for them. Allow me to get out the world's smallest violin to provide musical accompaniment their bitter sob story.

  • Smock Puppet, Frequent Fantasy Flyer

    >>> “Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper.”

    And as anyone who has paid any attention at Carpe Diem can tell you, the amount of manufacturing work coming BACK to America in the last several years has completely reversed that trend. It has not yielded new jobs for the most part because the factories have been retooled to use labor more efficiently, which is the primary reason why it's more profitable to make things here than with the cheap labor elsewhere.

    More critically, most of the money to be made in making widgets has gone. Out of a retail priced $600 iPod, China, where it's made, gets something like $6 total. The rest goes to Apple and other patent holders.

  • Smock Puppet, Frequent Fantasy Flyer

    >>> Please Mr President, lead, follow, or just get out of the way.

    Any particular reason you don't want to simply edit that down to:
    "President Downgrade, just get the eph out of the way."

    ??

  • Smock Puppet, Frequent Fantasy Flyer

    >>> Smart phones are an a good example.

    Indeed. Star Trek's communicator and tricorder devices in a single smaller package, and only 300 years early!

    >>> It doesn’t make sense to me, as I walk around with my neigbors all carrying a supercomputer (by 70′s standards) in our pockets.

    Go further than that. The shirt and pants you wear and the materials they are made of are often much higher grade than then. I bought a microsuede jacket for 30 bucks a couple years back. That's made of a clothe with such a high thread density that it's like leather in its softness and comfort. I have shirts made of similar material, and other shirts that are virtually silklike (including one that IS actual silk) that were all bought for a heck of a lot less than hundreds of dollars. The average person can easily afford, if they want it, "Egyptian Cotton", with 2-3x the thread count of "standard grade" sheets.

    While there IS a lot of "cheap shit" floating around, part of that is the tendency of a percentage of the population who look only at price. The availability of much higher quality goods is still offered at a much lower price in terms of hours you have to work for it than it was a mere 20-30 years ago, even IF they could make it then.

  • Smock Puppet, Frequent Fantasy Flyer

    >>> Instead of engaging in mind-reading, why not look and see what he says he wants?

    Better yet, instead of engaging in drooling sycophancy, why not look and see what he DOES in promotion of various ideals.

    Oh, wait, that brings us back to that mind-reading result you want to ignore.

    You don't have to read his freakin' mind, you only have to actually see the difference between what he SAYS and what he DOES.

    He SAID this administration would be "the most open in recent history". Meanwhile, he's expanded the scope and powers of the Fed to blow off FOIA requests.

    He's SAID he would return it to a focus on science and not "religion", while, of course, suppressing the publication of facts not in support of the AGW.

    He's SAID all manner of things, and DONE something else entirely. Not just once or twice, but so many times it boggles the mind.

  • Smock Puppet, Frequent Fantasy Flyer

    >>> I would like a constitutionally balanced federal budget...

    Which anyone with a brain would know is utterly and completely useless unless you add to it a codicil requiring that the government use GAAP to do their bookkeeping. Cf. how NY State (which has a STATE "BBA") "sold" Attica Prison to itself back about 1991 to cover a 200-million shortfall. It still hasn't paid back a penny on the principal in the intervening time.

    >>> ...and an amendment that every state get back roughly what it pays in. Parity.

    Benny, stop attempting to make up "facts" out of that vast flow of bovine excreta pouring out of your mouth. This claim is utter crap unsupported by actual data, and you know it.

  • Mark

    @Smock, Yes, states like CA have always complained that they get less in Federal dollars than other states, what is ignored is that smaller states need the infrastructure to ship their goods to the larger population states.

    EG if the feds didn't make I-80 and I-90, it would cost more to get grain, beef and pork out of Iowa, Nebraska and the Dakotas. So the spending does benefit the high population "rich" states.

  • caseyboy

    @ Benjamin. I'll call and raise you one. Lets just let the states keep their money. Why is the Federal government collecting money from the states and then sending it back to certain states? Lets get back to the original intent that those things that are not enumerated in the Constitution are to be entrusted to the states through the people.

  • Ted Rado

    Smock Puppet:

    Increased productivity usually leads to higher wages. Alternatively, it can lead to lower prices. Either way, standard of living goes up. I don't care whether my salary goes up or my costs go own the same amount.

    There ia a problem in comparing standard of living now with the past. When I was a boy (in the 30's) we had one car, one telephone, a victrola, and a couple of radios. I got my first car (used) two years after college. Now, everyone has several TV's, computers, cell phones, kids have their own cars, etc. By the standards of the day, my youth was upper middle class. Today it would be classified as living in poverty. Today's "poor" have TV's, phones, cars, and computers.

    When I got my engineering degree in 1949, I started at $3500/yr and lived very modestly. Today, new engineers start at 65K, get a new car and all the gadgets.

    Much has changed in the intervening years. Those who did not go to university could get a factory job which paid a decent wage. Since then, many factory jobs have disappeared due to increased productivity, among other things. Nowadays, one must learn a trade or go to college. In the latter case, one must study something for which there is a commecial demand. Many that are complaining about lack of jobs studied snap courses that cannot be used as a step toward a career. Who will hire someone who is an English Lit or Poli Sci major? We all make our own future to a large degree. One has to do their homework to come up with a viable life's plan. A local plumbing contractor complains that no one wants to get their hands dirty and become a plumber. Meanwhile unemployment "underwater basket weaving" majors protest in the park. Is our society fair and perfect? Of course not. But each of us can do a lot more to control our destiny.

  • A Critic

    "Are you poorer because you don’t have to grow your own food? Of course not. "

    Yes, you are poorer financially speaking as you must pay for the farmer and the middlemen (packers, shippers, processors, sellers). You are also poorer food wise as the quality won't be able to compare, both because lower quality but better storing varieties must be grown, and because the food won't be as fresh. You will also be poorer spiritually as you will not be as close to the earth, and you will be poorer mentally and intellectually as you will not be challenged by the complexities of farming. You are also poorer security-wise as your life depends on a very long supply chain.

  • Ted Rado

    A Critic:

    We got to where we are due to specialization. Early on, everyone did everything for themselves. Then people became specialists in things that they had a talent and interest for. I can't imagine a society without that specialization. I am a chemical engineer. It is better if I make fertilizer and the farmer grows the food.

  • Dan

    Good post.

    I'm actually pretty sure Obama does understand this concept. But his political strategy right now is to appeal to the voters who don't understand it. Politicians always condescend to their stupidist supporters. Just look at how the GOP caters to the religious right.