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Fatcat

Kartik,
The chart with the brain size is controversial if not outright wrong. The neanderthal brain size low in average larger than the one of the anatomically present human sapiens. It might be even arguable that our brans have shrunk even more after we switched to agriculture. We can imagine reasons like outsourcing part of the mental processing to the society and hence reducing the energy needs during lean times. Or the or brains might have acquired more efficient microarchitecture (implausible but could explain why there was a sudden increase in techolognical advances in the last few thousand years, especially compared to the Neanderthals, we stayed on similar levels for much longer)

Kartik Gada

Fatcat,

It is debatable. The chart might be strengthened if Neanderthals were removed outright, thereby avoiding the dispute of whether Neanderthals were inferior, or equal but just different.

The main key is how quickly brain volumes increased evolutionarily.

It is also certain that we are past the point where further brain growth will manifest, and where increases in intelligence will now be from better human-machine interfaces, where each type of intelligence will be available to a human on demand.

Drew

Now if someone can suggest a "temporary" direct stipend to help the economic impact of the Corona virus...

Kartik Gada

Drew,

Ironically, a number of ATOM advances are being sped up by the outbreak, including a shift towards QE going directly to people or at least waiving loan payments or payroll tax and having the central bank print the difference.

Once the crisis abates, many ATOM aspects will be revealed as having fast forwarded 2-5 years.

fatcat

@Drew

One example. Now the companies and schools are forced to use telecommute/work from home on large scale. The businesses that have the best remote work options will be affected much less by the quarantines. Automated/lights-out facilities will be impacted much less.

The airliners and hotel industries will be forced to trim the fat and become more efficient or perish...

Drew

Agreeing and seeing various proposals on how best to support those who can't work because of closed businesses - sending checks to those who file taxes, even a subset of those with lower incomes is one way of using existing systems and information until a way of sending money directly to all or all citizens or all adult citizens is in place.
This is an even better situation to promote directly sending money to people in general instead of offering cheap credit to the wealthy to increase the price of assets in order to provide stimulus during a recession.

Kartik Gada

Drew,

The outbreak has forced the Fed to do more ATOM-recommended things than they might have done in two years :

i) They reduced the FF rate from 1.5% to 1.00%, and may cut more.
ii) They did $1.5T in new liquidity today. Unfortunately, it was still just bond-buying and credit swaps, but the amount was in the right range.
iii) They are actually considering something more granular in terms of diffusion, since buying Treasuries does nothing short-term. Hence, they are edging towards injecting more directly. But this is still a long, long way from payouts directly to people, which is what is really needed.

It is sad that it took a pandemic to do this. But as a result, the economic outlook for 2021 and beyond has risen greatly.

This is also one of the best stock-market entry points one will ever see. Analogous to early 2009.

There is zero chance of inflation. Oil is $31, for god's sake.

Scott

Kartik,

What other pent up changes do you think the infection will instigate ?

Personally I think that this is going to be the beginning of the end for universities. They have already not been providing value to students, especially compared to online learning. However they have been protected by cultural inertia

However, now students will be paying 20,000 per year, and still having to attend online. How many of them will wonder why they are doing it ? How many incoming students next year, who are making decisions now, will choose online only ?

Additionally, this is not good for the over inflated real estate markets, such as Silicon Valley. If all the tech workers are are working from home for 6-12 weeks there will start to be a shift to "why do we need to come into the office at all" and "Why do I need to live somewhere and pay 4k a month in rent"

Kartik Gada

Scott,

Excellent question. That is going to be the topic of the next article.

Among other things, the Federal Reserve has cut the FF Rate from 1.5% to 0% in the space of a week, on top of $700B of new QE. What they would have otherwise done in 2 years has happened in a week. If there was a day when ATOM realities supplanted old-school egghead Macroeconomic thought, 3/15/2020 was it.

Universities, business travel vs. more reliance on videoconferencing, DAO technologies via distributed ledger for organizations, etc. all are things that will get boosted. Plus, oil is even more demolished than it has been. My thesis from 2011 that it will crash and NEVER go above $70 again is now much closer to being proven true.

Fatcat

To make profound changes the government has to react to brutal needs or at least perceived dangers. If there is no immediate danger it is very hard to change the policies. For example, income taxes were introduced during war times. In UK the estate taxes were introduced after the great war. Changes to the monetary policies have to come as reaction to a problem. And until recently, the economy was doing very well. Now we got mass quarantines and the measures taken seem either too severe and cripling the economy, or not enough if the infection is more dangerous than looks from the description. Or probably,as usual the authorities have to react in ways that are a compromise between different interests and public perceptions even, if it doesn't make much sense. After all, the incompetence is looming and taking any action looks better than a wait and see approach.

HB


I see read and hear all that and, as an individual, I wonder if it is time to shift out of the dollar and go with a currency (or other value holder) that will let you actually benefit from technological deflation rather than keep you trapped in an environment of technological deflation while the currency you hold stays stable or even inflates because various monetary redistribution schemes indirectly redistribute to “the people” beyond what people’s contribution to the ATOM is/was/will be.

I’ve actually been partially out of the dollar for quite a few months now because of the high US CAPE ratios and the threat of an effort-reward curve flattening Democrat in the White House, as I explained in previous article, but I do not feel it is nearly enough.

William Fletcher

Concerning a July 23, 2014 Futurist post containing Chart 2: World Oil Consumption per Capita on page 2. Please give us permission to use an updated version of the figure in our book. I could not find any other way to contact your organization.

This material will be reproduced in graphical form in our forthcoming book, “Reaching Net Zero What it takes to Solve the Global Climate Crisis,” by William D. Fletcher and Craig B. Smith, to be published in August, 2020 by Elsevier, Oxford, UK. The book has 17 chapters that discuss global warming origins, its effects on the earth, why it is a difficult problem to solve, and a recommended action plan. The book will be published in a small paperback edition (approximately 450 pages) with an initial print run of 150 copies, and an e-book version. The book is intended primarily for an academic audience. We would appreciate your granting permission at no charge or for a nominal fee.

Please specify any credit line you may require. If you do not hold the rights requested, pleased advise or direct this letter to the appropriate source. I can be reached at the address, telephone, or e-mail shown on the letterhead.

Thank you kindly for your assistance and for your consideration of this request.Thanks

Kartik Gada

Hello William,

Permission granted, and thanks.

I am one person, rather than an organization.

Do you mean this chart, by Morgan Downey, about oil consumption per capita?

https://futurist.typepad.com/.a/6a00d83452455969e201538f9a0bdf970b-pi

The July 23, 2014 article was about education, rather than oil.

fatacat

One interesting development corona virus pandemic brings is a hastened demise of theaters. The new movie releases will be available almost immediately for home viewing: https://www.cinemablend.com/news/2492683/trolls-world-tour-the-invisible-man-and-more-theatrical-films-are-all-hitting-homes-early

fatcat

Kartik,

since a lot of central banks are doing QE now and there are some disaster relief funds can a QE be done as direct to people transfer. After all, there are many people who cannot work and have to pay rent/food/heating.

I think it can start with a disaster relief QE for individuals. The most vulnerable will see the biggest benefit of a modest amount. It can even go towards the taxable income. There should be about 200 million adults in US, so a QE of 600B would mean 3K per person.

Now the question is how to sell it to the FED and the government. At the moment we need to keep at least the semblance of being able to unwind it. So it could be structured as interest free personal loans (so no tax per se) which can have some tax breaks when returning

Fatcat

Here's a discussion of one time distribution money too US citizens. For now the talks are for one off...
https://economics.rabobank.com/publications/2020/march/us-helicopter-money/#f5e49e22-9db8-4a51-a167-a17ce5396c8c

HB


If we can make this permanent and at a high enough level then we can stop going to work. Not just for the duration of the Coronavirus, but forever! Where do I sign up? Whom do I have to vote for to enter this long awaited dream?


https://www.catholicconvert.com/wp-content/uploads/20110831-075831.jpg

Drew

Hi HB,

It reallly is the medical care/insurance isn't it?

From previous comments, you know some people who have made enough to be "work optional" and maintain an upper middle class California lifestyle. You yourself could probably sell your California residence, buy somewhere much cheaper and live off investments instead of work, but it would be very expensive to self-insure until medicare kicked-in, plus whatever you need to support dependents.

UBI won't support an upper middle class California lifestyle or any where in which there is strong demand to be, but there a plenty of nice houses in small towns in Iowa that it could pay for.

Drew

Drew

KG,

One of the issues in ATOM has been measuring economic growth in a deflationay economy of increasing capabilities. I know that you were pointing to asset values, and I agree that they will return eventually, but this latest crisis does illustrate how much they are driven by psychology (including money supply and interest rates) instead of impersonal predictable forces.

Looking forward to your article on the impact of this crisis as I'm sure we are all looking forward to a drive to increases in productivity in the Eds and Meds industries that may come about.

I hope all are well as well as those you love,
Drew

HB


Drew,

For insurance there’s Obamacare once work becomes obsolete. So long as UBI is not considered part of adjusted gross income (AGI), Obamacare will be virtually free. If UBI is not excluded from AGI right off the bat, then we can certainly vote to make it so. Or, alternatively, since for up to about $100k of annual income Obamacare expense is limited to a single digit percentage of AGI, we can just vote to increase UBI by a few percentage points to cover the Obamacare expense too. What’s a little more UBI; “It’s only wafer thin” as John Cleese would say.

As voters of the western world, we have discovered and proven that by voting ourselves all kinds of goodies we can corner our government into unlimited amounts of debt and consequently force the FED to print unlimited amounts of money to finance it. I think we have found the magical way to live better and better under an ever flatter effort-reward curve. Less effort, more rewards. We are now in the process of finally completing this great discovery by finally liberating ourselves from work once and for all via UBI. It is too good of a dream to pass on, to at least not have a go at it and see how it works.

The only other thing we need is a few people who can keep the ATOM going, a few good people who are addicted to work who will keep working even when a good basic life can be had without work. And we know for sure that enough of these people do exist already, judging from the greed by which some people keep working and accumulating wealth even after they’ve secured a basic good life and beyond.

So I think we’ve finally found the holy grail. All we need is the political will to implement it. We have been denied the dream long enough already.

Kartik Gada

The intention of ATOM-DUES is that it is non-taxable, and that eventually, all income is tax-free.

But I think the willingness of people to work will be more, not less, once return on effort is 100% rather than 50%. No income tax means that rather than an employer paying $2 for an employee to get $1, the employer can pay $2 (or $1) for the employee to get $2 (or $1). This will lead to far more work, and more job creation.

Drew

One of the other learnings from this crisis will be is who is "essential". And just as there are those who are willing to go out and work on electrical transmission wires at all times and in all weather for the greater pay, there will be those who will be willing to work for a bit more money. But people won't have to put up for crap unless it is worthwile. Drew

HB

I have a hunch that most people when given $50k per year will stop working.

To quantify this phenomenon one has to realize that tax rates do not tell the entire story of work incentives. There is also what we may call “marginal utility of money”. It is simply the realization that the utility of each extra dollar earned already decreases naturally with rising income. For example, there is a very big difference in the drive by which people pursue their first million vs their second vs their tenth million. That is why it is already difficult to keep richer people employed, and, of course, progressive taxes make things worse. In other words the reward vs effort curve already becomes less steep with rising income due to the natural decrease in utility of money as income rises. UBI offsets the effort-reward curve into the higher income where the marginal utility of money is naturally lower.

I think that we all instinctively understand that when people are eventually given $50k or $100k unconditionally, most will stop working. At least that is what I would do. Just easy gigs for extra income perhaps, certainly little desire for colleges careers and stresses that would unsettle my peaceful enjoyment of the handout.

In more immediate terms, since UBI will presumably “replace taxation and all other benefits”, I’m just waiting to see which tax or other government program will this temporary coronavirus UBI eliminate, even if only temporarily? Any guesses ?

Drew

I think people will be open to a social outlet like working in a coffee shop for a small amount of non-taxed cash. But putting in the midnight shift at the meat-packing plant, that will take quite a bit more. If payroll taxes aren’t being collected and income taxes are postponed, and both temporary measures keep extending...

Drew

There will also be marginal demand curves - if you want the new car/home entertainment center subscription/nicer house you will have to be earning a better income than the basic dues. Drew

Kartik Gada

HB,

I have a hunch that most people when given $50k per year will stop working.

First of all, that income level pays relatively little income tax in the US.

Secondly, anyone with $500K of liquid net worth already earns on average $50K/yr just from the S&P500. If you want to account for down years, fine, the threshold is $600K liquid assets.

That is why it is already difficult to keep richer people employed,

I know of no one with a highly successful career, who wants to stop. For these people, status, as well as the interaction, are reasons to keep going, even if their passive investment income is already far more than $50K/yr.

The wives of rich men are another matter. Remember, they are not the one who made the money in the first place.

I’m just waiting to see which tax or other government program will this temporary coronavirus UBI eliminate, even if only temporarily? Any guesses ?

I think you know that the decision-makers are not reading the ATOM publication. This means they don't know that taxation costs more than the dollars collected, and they are also too corrupt to not damage the economy for their own benefit.

HB


Drew,

What you are describing in your last post is a rise in inflation due to UBI. Presumably that will not happen, or will be very modest. In fact, presumably, according to its proponents, the whole UBI is done exactly to counter technological deflation and turn it into mild inflation. Why? Well, because according to UBI proponents the ATOM upends all economic theory except the fact that we need some inflation.

In other words, yes everyone is getting a UBI but technological deflation presumably makes the new entertainment center and new house so plentiful that everyone can still buy it with their UBI.

My point, to which UBI proponents probably disagree, is that in such a world there is little difference in reward between being an ATOM contributor vs just ride along passive UBI earner. So people will go idle. All you have to do is wait a year and today’s luxuries will be available to you at UBI prices next year, and you don’t have to do anything for it. You can just the let the few ATOM contributors figure out the tough ATOM problems while you enjoy your exponentially rising UBI. And after being idle for a few years you will be so far behind technologically that you you will never have the chance to ever get back on the boat and become an ATOM contributor. You will become forever dependent on the UBI dole and your only interest will become to vote for an ever bigger UBI. Faced with this tyranny, at some point ATOM contributors will leave you and self aggregate into a freer jurisdiction from where protected behind their superior ATOM weapons will cry out to the UBI masses: Want your UBI? Μολών Λαβέ!

Drew

HB,

Not a rise in inflation, just cost differences depending on status/newness/fashion - like buying the new car vs. the depreciated two year old car. Living in the lakefront property vs the apartment with big screens for views, even though the big screens may be able to produce even more beautiful views.

Can ATOM contributors manage to set up their own society? From our discussions on demand for Silicon Valley real estate, so far it hasn't been possible so imitate an existing society in a less expensive location, much less create a new one.

As technology improves I'm sure that there will be additional attempts, but I suspect ATOM contributors, like the meatplant midnight shift, will prefer greater status within an existing society rather than isolation in a new society.

Drew

HB


Kartik,

People with highly successful careers do not earn $50,000 per year. They earn a lot more. But these more successful people are no more than, say, 20% of the population. A high proportion of the remaining 80% who earn $50k or less are likely to quit if given an unconditional, stable, and guaranteed to rise $50,000 per year. These people will quickly become a permanent underclass whose only interest and drive is to vote for ever more UBI. As I said in my previous post this will upend societal dynamics, including a likely swift and organic geographical emigration rebellion on the part of the ATOM propelling minority.

Very few of these 80% $50k earners have $500k in investments today to even see how many would quit. Besides, retiring on $500k of capital hoping to manage 10% returns from the S&P would be way too risky, even when using today’s popular financial wisdom. If you used the boiler plate financial advice of a 4% annual withdrawal rule then you would need $1.25M to quit and retire. But unlike the stable and guaranteed to rise UBI this investment stream would be neither guaranteed nor stable. So $2M is a better comparison. There is an extremely low percentage of people with careers earning $50.000 per year who have accumulated $2M to see how they would behave.

A different but classic scenario which may provide some insight is the typical high school graduate who gets his first job at $35,000 per year and thinks he has so much money that he gets his own apartment and fancy car without any thought at saving anything, except perhaps a small 3-6 month emergency fund. You suppose such a person would even get a job if given $50.000 per year, stable and guaranteed to rise? My point is that UBIs and similar handouts do not only change current behavior. They have significant impact on career choices early on and so the leverage of such choices compounds dramatically with time later in life. How many young would even pursue a higher education if a guaranteed $50k per year, and rising, were awaiting them at age 18?

That is what I meant when I said I’d personally quit if given $50k per year. I would not quit now, though $50k guaranteed to rise for life would certainly put a complacency dampener in my life, but I doubt I would have even gone to college if given $50k/y starting at age 18. Even today when $50k might not be enough to make me quit, will my post UBI competitiveness still be greater that that of my international peers? The margins that make the American effort-reward curve a worldwide winner are not that wide.

I think one would need to live in Europe to begin to see how much less ambitious and how much less driven both competent and mediocre people become even under much more moderate handouts. Even with these existing current more muted European handouts I’m always amazed how much less ambitious than Americans European professionals are, even at higher levels of competence. It’s not the culture folks. It’s the economic effort-reward curve environment. Or, in other words, it is the economic effort-reward curve that makes the motivation and ambition culture, not the other way around.

From your comments I suspect that you are surrounded by the Silicon Valley entrepreneurial spirit. But that is an exception, even within America. Europe does not have such a spirit, not even in small pockets. Again, it’s not the culture folks. It’s the economic effort-reward curve environment. Why do you think European annual economic growth trendlines are stuck at 1% when the rest of the world is growing at 4% average? Which BTW is an arithmetically deterministic trajectory of national decline that will find most European countries ranking as middle income countries in the much wealthier world of just 2050 AD?

A $50k UBI would completely wipe out what we know as American dynamism and actually go way beyond that to turn America into a productivity basket case. The moment I catch drift of any such transition in the making, I’m out of here. I’m already diversifying both activities and capital outside the US under much more moderate effort-reward flattening threats. Not that much because they affect me personally but primarily because I think that our American margin of advantage is now so thin when it comes to the steepness of the effort-reward curve that I think we are just a few extra small steps of redistribution from losing it, at which point the entire competitiveness advantage that made Americans the only wealthy big nation in the world will just tip over, and we will join Europe into an annual 1% (lack of) growth trendline to arithmetically deterministic decline.

The general backdrop is a world that is changing faster than ever, and accelerating. Geographic mobility is becoming imperative. National ascents and declines that used to take centuries to unfold will now complete in a few short decades and then ever shorter timeframes. In my opinion, those of you who have no geographical mobility, have your lives tied to America, and hope that something like UBI will carry you through, are severely gambling your future in a very dark direction. I have no hope of changing public opinion, whatever happens will happen, so it has been a decade that I have been geographically diversifying my options, something that is a good thing to do in our age regardless of effort-reward upending proposals like UBI or not. Certainly more widespread talk of UBI would make me accelerate my efforts, and I would urge you to do the same.


Drew,

“Can ATOM contributors manage to set up their own society? From our discussions on demand for Silicon Valley real estate, so far it hasn't been possible so imitate an existing society in a less expensive location, much less create a new one.”

Good point on Silicon Valley. Like all bubbles, a trendline seems invincible, until the bubble bursts. Most often the shock piercing the bubble is exogenous to the dynamics of the bubble itself. For example, I’m afraid that the lasting effect of current covid19 panic on markets will not be covid19 itself but the bursting of the financial repression bubble whereby central banks all over the world have kept interest rates permanently too low (so that we voters could finance the goodies we have been voting ourselves hoping someone else will pay the inefficient state that will attempt to provide them) inflating CAPE ratios to distorted levels and creating near junk debt yielding little, which we may now pay for through a scenario similar to Japan’s three lost decades (and counting).

As I said, things are turning ever faster, consistent with the acceleration inherent in the ATOM. Bubbles will form and burst ever faster. It is too early to tell if current covid19 related events are bursting yet another bubble, but we are only 12 years out from the bursting of the last one. We fixed the last debt bubble with even more debt. Will we repeat with even more permanently accumulating debt? At which point will the debt dam we keep piling up burst and sweep everything in its path? Or lead to thirty years of Japan like stagnation? How many people have contingency plans for such a scenario? These scenarios portend to situations that Americans have never experienced. But as I said, the world is moving ever faster, things are turning ever faster, many things never experienced before will come in our lifetimes.

Kartik Gada

HB,

A high proportion of the remaining 80% who earn $50k or less are likely to quit if given an unconditional, stable, and guaranteed to rise $50,000 per year.

I am not so sure they will stop. They might do something they like much more, for less pay, but they won't stop. We will also have many more entrepreneurs.

Plus, to think that would seem to validate the European view of a flatter effort-reward curve, which you have frequently criticized. If you believe that many will stop at $50K (which I don't believe), then the European approach is not wrong.

I think one would need to live in Europe to begin to see how much less ambitious and how much less driven both competent and mediocre people become even under much more moderate handouts.

I say 55-60% tax rates are the bigger reason for this than the level of handouts.

A bigger dimension to account for, which goes back to Imran's articles, is that if marriage and fatherhood are so disrespected in this society, a generation of single men might just opt for the $50K easy life, vs. the hard work of earning far more to support a family. That could happen, but it is more due to marriage and fatherhood being made unattractive to men, rather than the level of handouts.

Marcus Scott

Hi KG

What do you rate are the chances of hyperinflation?

Kartik Gada

Marcus Scott,

Zero chance, other than some two-month anomalous blip at most.

Have you read the ATOM publication?

Drew

We've done our reasonable predictions, maybe it is time for some low probability predictions - Here's mine, with this wakeup call on biology we may end up getting a "moonshot" drive on longevity research. Not sure if this will be more helpful than various start-ups working the issues as it can easily degenerate into "safe" reseach for grant money. Drew

Stephen Murray

Another atom type disruption is the growth of independent and individual movie makers. A very popular example would be the YouTube fan movie "Astartes". You have Hollywood level visuals , a compelling plot and atmosphere. Although only a few minutes, it's also made by a single person

Simply put the multimillion-dollar movies put out by Hollywood are been given a run for their money by a fan project made by a man in his basement,for small money

This is highly disruptive the Hollywood which is probably overdue given the low quality output and overly politicized nature of that industry in the past few years

there is obviously an atom concept here in that these high quality visuals are now capable of being generated on ordinary consumer tier PCs

Marcus Scott

I've been reading you articles since around ~'06-'08. A lot of other people too. I've occupied just about every political position since my youth then, moving steadily rightward. I don't have a finance background. By 2012 I was a Ron Paul maniac, convinced the whole system was done for. We were about to be Zimbabwe.

Then nothing. No collapse followed and for years & years we were seemingly in recovery. The doomsayers seemed less and less credible to me. That's when I broke with them. Then trump, MAGA, and Nationalism swept. I didn't even vote. I was apathetic about the whole political process. The Peter Schiff types said it'd been better if Hillary won, but that was surreal to me, and seemed a bridge way too far.

Looking back on those days I realize it was only the fearlessness and passion of youth fueling my zealotry.

It was a theoretical exercise to me. I had nothing. I pretty much lived like a hobo. Now I've put together a small nest egg - about 40k - and I'm scared outta my mind. There are people emphatically claiming all this going on right now is front to cover up collapse of economy.

I don't know what to think. But reiterate the fear. Are you essentially a greenbacker?

Kartik Gada

Stephen Murray,

Certainly. The cost structure of big Hollywood studios is all wrong, and it is surprising indies have not done better long before now. I have always thought that there should be a vibrant market for independent films made for $1M, that generate $6-$10M of revenue. Done.

But they are able to shut down a lot of independent work. For example, Kickstarter funded and fully produced some Star Trek content, with known actors, for very little cost. But the big studios were able to shut it down.

It is also surprising that other countries with very mature film industries (Italy, India, etc.) cannot produce films at much lower cost that garner eyeballs away from Hollywood productions. Then again, Disney is minting money by making live action exact replicas of famous animated films. I can't fathom why anyone would watch that if the animated version already exists. If the public is this easily satisfied, then perhaps we overestimated them.

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