I’m happy to say that we’ve reached MSM peak stupid thanks to Greg Jericho:
So yes, we are seeing a solid increase in employment, but this is not resulting in a rise in overall average incomes like we would expect and as a result we are not seeing a similar boost in spending or consumer confidence.
And when you throw in to the mix the fact that wages growth across the board is down it makes for a disconnect between the unemployment rate and our desire to spend.
But perhaps there is some hope.
Often when talking of the need to encourage investment, economists talk of “animal spirits” – essentially the need for people to be willing to take a risk and invest because they believe things are going to get better.
In a speech this week, the deputy governor of the Reserve Bank, Guy Debelle listed this as the most powerful reason why non-mining investment has been weak.
A similar case might apply to consumer spending.
One problem with consumer confidence is that it is generally linked with the performance of the government. If people think the government is doing well they are more inclined to think the economy is performing well and also that they are confident things will either stay good or keep improving. This is why ALP and Liberal voters often swap their levels of confidence from positive to negative after a change of government.
With the government mired in bad polls, this is unlikely to change, but perhaps the overwhelming yes vote result in the marriage equality survey might produce some sense of optimism that things are not so bad.
Of course should the conservatives forces conspire to bog the process down, any optimism would probably dissipate, but were it all to go through quickly, perhaps people might gain some sense that life is not so bad.
And while it is unlikely to provide a significant increase in total spending, at the very least there should be a bit of a boost from shopping for some long-waited-for weddings in January.
The clear lack of enthusiasm with which Jericho dumps this garbage rather suggests it’s been foisted on him by the narrow editorial point of view at The Guardian. To wit, don’t write about the energy gouge. Or the destruction of wages. Or the rabid class war underway via mass immigration that is sitting on wages, destroying amenity as well as productivity and boosting asset prices for the wealthy that don’t spend it. Don’t write about the structural adjustment underway in the terms of trade and its mismanagement. Or address the looming household debt deleveraging. Don’t talk about fiscal or monetary policy or the currency. Or the cavalcade of moronic policy mistakes that have households on their knees. Do slap on the pink blindfold and point to the stone dead confidence fairy because that’ll fix it.
You are usually a decent author, Greg, but this article is mere MSM tripe supporting the unsupportable.
Meanwhile, Jess Irvine also sinks into self-referential tedium. I’m pretty sure she has a brain. We catch glimpses of it every now again. But by golly she’s determined to bury it:
In an increasingly rare occurrence, I found myself propping up the bar at a fancy hotel past 1am. All the bright young things of journalism were there. And me, about to unwittingly invite ridicule for my increasing techno-inadequacies. The catalyst for my humiliation? The simple act of pulling out my wallet.
…So how does a bright young thing order drinks at a bar these days? Simple. No need for wallet at all. Pull out your iPhone – which is never far from hand – and with a press of the thumb – to verify your fingerprint – tap your phone to pay. Wallet non-essential.
…Supporting the techno-pessimists is the observation that measured productivity in our economy has gone backwards at the same time as the invention of smartphones, paywave and the “internet of things”. In its recent report Shifting the Dial the Productivity Commission acknowledged that smartphones appeared to have done little, so far, to boost output per working hour – the definition of productivity.
…But the benefits remain. Our smartphones are the modern toolbox: a credit card, a photo album, a compass, a map, a radio, a music library, a dictionary, a Bible, a library, a camera, a video, a shop, a ride service, a torch, a printing press. And about a million other functions – and some that haven’t even been invented yet.
…Increasingly, we’re learning to be the atomised individuals economists always assumed us to be, using our powers of reasoning to search out the most optimal, satisfaction-maximising transactions and interactions. To navigate and thrive in this new world requires us to live deliberate lives. To examine our choices and make better ones. To draw boundaries and set goals. To learn to use technology as the tool it was always meant to be – to connect with others, to make a difference and to enjoy ourselves – not as an end in itself.
After all, it’s the feelings that matter isn’t it, Jess? How you feel about tech is the issue here. Not the tsunami of automation that is coming to challenge low paid labour. The same wave that will displace 300k Aussie drivers in the next few years, wiping out all of those ‘last chance Larry’ Uber drivers that are delivering us a fake unemployment rate. And that’s only the tip of the iceberg. The ILO estimates that three in five jobs across ASEAN will be automated in the next few decades:
For the ASEAN-5 (Cambodia, Indonesia, the Philippines, Thailand and Viet Nam), around 56 per cent of all employment has a high risk of automation in the next couple decades (see figure 3). However, the risks of automation differs widely across the countries. Among the ASEAN-5, the share of jobs with a high probability of automation is lowest in Thailand (44 per cent) and highest in Viet Nam (70 per cent). In the Philippines, Indonesia and Cambodia, the shares are 49 per cent, 56 per cent and 57 per cent, respectively. The differences in the labour market structures of each country produces these variations. For example, in Viet Nam, where the share of low-skilled elementary occupations in total employment (around two in five) is the highest among the five ASEAN country samples, the overall probability of computerization is also the most pronounced. On the contrary, the Thailand labour market exhibits the smallest share of low-skill employment (less than one in ten). Among wage and salaried workers, who are more likely to work in establishments with the capacity to be early adopters of new technologies, around 56 per cent face a high probability of automation (see figure 4). In Thailand and Viet Nam, the prevalence is lower, around 51–52 per cent. Conversely, only in Cambodia does the risk of automation for wage earners (68 per cent) differ significantly from the ASEAN-5 estimate. This could reflect the relatively less diversified nature of the Cambodia economy and labour market. Of the country’s 3.3 million wage employees, 1.8 million (54 per cent) are concentrated in just three sectors: agriculture, garment manufacturing and construction. All three industries tend to be highly susceptible to technological substitution.
As automation moves up the value chain, it’s coming also to Australia’s much-touted services:
As it happens, I am an optimist about this. If it is managed right it will deliver such a gigantic boost to productivity that income will flow. But it must be managed right or all of those benefits will accrue to capital and labour get a good old fashioned 19th century rogering before turning to open warfare. Alan Kohler does a better job of keeping a flickering light of journalistic brains alive:
It’s already happening with AI chat bots and telephone services being done by artificial intelligence. Another example: IBM is selling its Watson AI service in Australia to banks for doing compliance — that is, checking advice documentation and phone recordings for whether advisers are followed the rules (Watson can check every single one, rather than the random samples that are checked now).
AI and machine learning are merely the application of vast amounts data with equally vast computing power working algorithms that “learn”. For example, Watson’s “brain” holds all 5.5 million articles in Wikipedia, growing at 20,000 per month, and each fact contained in it can be “remembered” at any time, more quickly than the human brain can remember what it had for breakfast.
So, artificial intelligence is going to enter every aspect of our lives at some point.
We don’t know whether it’s the biggest thing or the worst thing, to quote Mr Hawking, but we know for sure it’s going to depress the prices of services, in the way that China, and then robotics, depressed the prices of goods.
I’m guessing that the prices of goods won’t rise to compensate — as Chinese wages rise, robots or still cheaper countries move in.
That means it’s likely that inflation will only decline from here, not rise.
If that’s correct, then interest rates are going nowhere fast. Those who are worried that inflation and monetary tightening will kill the bull market can stop worrying — about that at least.
What AI does to the company you have invested in, not to mention your job, is another matter.
No, Alan, what matters, is how Jess feels about her iphone.
It’s not all the fault of these dumbed down exemplars of MSM peak stupid. The media industry has been so gutted by technology itself that there are no editors of quality to prod and prompt better from their highly paid wankers. The middle management of the media is now at its most inadequate of our lifetimes. Soon also to be pre-programmed property-loving AI.
Which only leaves MB to crack the whip.
