16 March 2021

1) The technology known as carbon capture and storage, a concept that has been around for at least a quarter century to reduce the climate damaging emissions from factories, is being pursued by major international oil companies. The idea sounds deceptively simple, just divert pollutants before they can escape into the air, and bury them deep in the ground where they are harmless. But the technology has proved to be hugely expensive, and so has not caught on as quickly as advocates hoped. Exxon Mobil, BP and Royal Dutch Shell plus lesser known Norway’s Equinor, France’s Total, and Italy’s Eni are investors in capture and storage projects.

2) Reports are, that amid all the trillion dollar spending, the White House is now starting to consider how to pay for the programs meant to bolster long term economic growth with investments in infrastructure, clean energy and education. The challenges are twofold: 1) how much of the bill is paid for with tax increases and 2) which policies to finance with more borrowing. The administration hasn’t decided whether to pursue a wealth tax. With interest rates so low, U.S. borrowing costs are manageable right now. The federal government currently collects the biggest chunk of its revenue, about half in 2019, from individual income taxes, which now tops out at 37% of income above $518,000 per year. For now, there are few signs of inflationary spiral or fiscal crisis that policy makers thought would accompany debt levels like today’s. The Congressional Budget Office this month projected that the national debt would double as a proportion of gross domestic product over the next 30 years. But the cost of borrowing is rising for the government and across the economy so the large debt could mean trouble in the future.

3) India’s foreign-exchange reserves has surpassed Russia’s to become the world’s fourth largest, as India central bank continues to hoard dollars to cushion the economy against any sudden outflows. Reserves for both countries have mostly flattened this year after months of rapid increase. India’s reserves, enough to cover roughly 18 months of imports, have been bolstered by a rare current-account surplus, raising inflows into the local stock market and foreign direct investment. India’s foreign currency holdings fell by $4.3 billion to $580.3 billion as of March 5, edging out Russia’s $580.1 billion pile. China has the largest reserves, followed by Japan and Switzerland on the International Monetary Fund table.

4) Stock market closings for – 15 MAR 21:

Dow 32,953.46 up by 174.82
Nasdaq 3,459.71 up by 139.84
S&P 500 3,968.94 up by 25.60

10 Year Yield: down at 1.61%

Oil: down at $65.29

7 December 2020

1) Denmark has announced it will stop offering new oil and gas licenses in the North Sea and will phase out oil production all together in 2050 as part of the country’s goal to become fossil free. The Social Democrat government reached a deal with a majority in parliament to drop Denmark’s 8th licensing round plus any future exploration plans. Conditions for the oil and gas companies currently operating in Danish waters will remain unchanged until production stops in 2050. The decision will cost the country about $2.1 billion dollars a year. Production for 2020 is 83,000 barrels of oil plus natural gas equivalent of 21,000 barrels. With Denmark being the European Union’s largest oil producer, this decision will resonate around the world.

2) Reports are that a $908 billion dollar stimulus plan has gained the support of top congressional Democrats and several senior senate Republicans, that combines many of the central priorities of congressional leaders of each party, as well as those of President-elect Joe Biden. There is funding for health officials to help with the distribution of the coronavirus vaccine, as well as aid for hospitals, the hungry, and the U.S. Postal Service. The most expensive item in the bipartisan plan is $288 billion in assistance for U.S. businesses, with lawmakers insisting that funding is geared primarily toward assisting small firms, including continuation of the Paycheck Protection Plan. There is also a range of funding for smaller measures aimed at meeting other critical needs facing the country such as schools and education funding, transportation systems, agriculture, housing and rental assistance, the vaccine program, and the U.S. Postal Service.

3) Employment picture is darkening, with the U.S. economy adding in November the fewest workers in six months, hindered by a resurgence in new COVID-19 cases that, together with a lack of more government relief money, threatens the recovery from the pandemic recession. The Labor Department reported the addition of 245,000 jobs in November, much less than the 440,000 expected, and far less than the 610,000 in October. The unemployment rate slipped from 6.9% down to 6.7%, but that was because fewer people were looking for work. With bipartisan consensus, there is hope of the $908 billion dollar aid package passing before Congress breaks for the holidays.

4) Stock market closings for – 4 DEC 20:

Dow 30,218.26 up by 248.74
Nasdaq 12,464.23 up by 87.05
S&P 500 3,699.12 up by 32.40

10 Year Yield: up at 0.97%

Oil: up at $46.09

4 May 2020

1) The coronavirus economic troubles has reached out to touch social security. The social security is financed by the payroll tax, those social security deductions on worker’s paycheck and the SSI employers pay for each worker. With a little over 30 million people now unemployed, one out of every six American workers, the monies needed by the government to send out social security checks has been drastically reduced. But the government’s obligation has not been cut, they are sending out the same amount each month, so the government must spend monies they get from other sources. The social security program is the largest single source of federal spending, which is now even more shakier than before.

2) More states are beginning the process of relaxing restrictions on businesses and shut down orders. About half of the states are retracting closing orders for businesses deemed nonessential allowing them to open for business again. The states are using a patchwork of strategies to reopen, based on the type of business and how their operations expose the public to infection of the virus. Two states with large populations, Texas and Ohio, have joined in the reopening process. States are feeling enormous pressure to restart businesses and restore social life, mostly in the South, Midwest and mountain West leading the way. There are big questions if the reopening is too early, that the waning virus infection might suddenly erupt in force.

3) American colleges and universities are also facing crippling financial difficulties from the coronavirus impact, with some small colleges already closing. They are having to bear the cost of having to suddenly shift to online classes, giving partial reimbursements of room and board, plus deferring summer secession without a change in their fixed cost of operations. Many experts considering the college education system is being forever changed in America.

4) Stock market closings for – 1 MAY 20:

Dow 23,723.69 down 622.03
Nasdaq 8,604.95 down 284.60
S&P 500 2,830.71 down 81.72

10 Year Yield: up at 0.64%

Oil: down at $19.69

5 February 2020

1) As the coronavirus continues the slowing of China’s economy, coupled with a general slow down in world economies, world oil prices are dropping. China is the world’s largest oil importer, with speculation that if oil continues to drop, America can expect a drop in gasoline prices, possibly going below $2 a gallon.

2) The credit card company Visa is planning major changes to the rates U.S. merchants pay to accept its cards. These changes are the biggest changes in a decade, with Visa hoping to encourage people to abandon checks and cash. Higher rates are coming for transactions on e-commerce sites, while certain retailers such as real estate and education will see lower rates. Retailers have long complained about the $100 billion plus dollars they spend each year to accept electronic payments.

3) Ford Motor Co. has posted a fourth quarter loss and provided weaker than expected 2020 forecast due to continued higher warranty cost, lower vehicle volumes, lower results from Ford Credit branch, and higher investment in future transportation. This is coming at a time when Ford and other automakers are making huge investments in producing a line of electric cars and trucks. For the fourth quarter, Ford is reporting a net loss of $1.7 billion dollars, or 42 cents a share. Revenue for the fourth quarter was down 5% to $39.7 billion dollars.

4) Stock market closings for – 4 FEB 20:

Dow                   28,807.63    up    407.82
Nasdaq                9,467.97    up    194.57
S&P 500               3,297.59    up      48.67

10 Year Yield:    up   at    1.60%

Oil:    down   at    $49.45

4 September 2019

1) The ever present problem of growing student debt is being aggravated by the ever rising cost of college. This rise in cost is fueled by decreasing funding by governments, a lack of cost controls by college administrations and an emphases on plush facilities instead of real education support.

2) Manufacturing shrank in August for the first time since August 2016. The manufacturing index slid to 49.1 from 51.2 in July, where an index below 50 signals a contraction. Production declined by 1.3 percent while employment fell by 4.3 percent with new orders falling by 3.6 percent. With the trade war increasing the cost of Chinese manufactured imports, it would be expected that American manufacturing would be increasing.

3) The United Auto Workers union is targeting GM for contract talks, with the UAW approving a strike. The UAW represents nearly 150,000 hourly workers at Ford, General Motors and Fiat Chrysler with 96% of it’s workers OKing a strike. Leaders of the UAW are under investigation for corruption by the FBI who have conducted raids on key leadership members recently for mis use of monies. The union is angry at GM for layoffs and the closing of plants, plus production plants in Mexico.

4) Stock market closings for – 3 SEP 19:

Dow              26,118.02    down    285.26
Nasdaq           7,874.16    down      88.72
S&P 500          2,906.27    down       20.19

10 Year Yield:    down   at    1.47%

Oil:    down   at    $53.90

THREE STRIKES!!!THE 3 METHODS of TECHNOLOGY DISPLACEMENT: AMERICAN YOUTH STRIKE!!!!!!!!!!!!!!!!!!!!!!!!

By :James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

Today, when you say ‘technology displacement of people’, everyone thinks of the poor little old factory worker standing on the assembly line. Some machine is brought in, the down trodden worker is handed a pink slip, pointed to the door and told, “Don’t let the door hit you in the butt when you leave!” But this is the displacement when I was a millennium … many decades ago. This is the image most Americans still have of technology displacement. When the 2008 recession started, you may have noticed a number of news stories about professional people, corporate middle management making six figure incomes, who got laid off. Where once, they could have a new job in just days, or a few weeks, they had gone months even years without any offers. They were no longer needed, simply because those who remained working were now able to do the jobs of those laid off because of technology. In other words, those laid off had been displaced by technology just as factory workers had been decades before.

Images of factory workers being laid off when a new machine is brought in to do their jobs, persist as how technology displacement works. In reality, there are three ways or methods which people are displaced by technology, and they are:

1) Direct Displacement – The traditional technology displacement that everyone always think of, where a machine is brought in that directly replaces an individual, often several people. The classic example is the machinist, those workers who created the industrial revolution, who made modern America. These people were replaced, rather quickly I might add, by robot machine tools that not only did the work of highly skilled machinist, but did it faster, more accurate and much better all around. Not only did these robot machines take over the highly skilled and much sought after jobs of machinist, but they allowed the extensive migration of manufacturing

from America. Those skills once so required by manufacturing were no longer needed, making machinist obsolete.

2) Oblique Displacement – The second means of displacement is by a technology allowing one person to do the work once done by many. Using a machine, if one person can do the work once done by ten, then those remaining nine people are out of work, and so therefore are no longer needed. A 90% reduction of the work force. An example is draftsmen, those skilled workers who create and maintain the engineering drawings needed to define a product for manufacture … or for building your new house. These drawings were once done using drawing boards, T-squares, pencils, scales, dividers, compass and triangles. Just like an artist does, the draftsman would draw an image on paper of some part or thing, which was scaled so someone could make that part without error. This was a highly skilled occupation which took considerable time to correctly create such drawings, and even more time to make changes as a design evolved. But using a computer and CAD (Computer Aided Design) software, a draftsman could not only make drawings faster, but much more accurately, more accurate than a part could actually be made. A draftsman did the work of many traditional draftsmen using pencil and paper.

3) Indirect Displacement – The third method is where technologies displaces a number of people who have the intellectual ability to do the work of an unrelated career field. While not as clearly identified as the first two methods, especially the technologies doing the displacement, it has had a profound effect across the American economy. For years technologies have been displacing young people, especially new college graduates, who find limited job prospects for their field of studies. They have returned to universities to acquire a law degree, then pass the bar to become lawyers. These process has so glutted the job market for lawyers, that now between 20 and 50% of new lawyers are unable to find employment as lawyers. While there is no machine that has directly replace lawyers, they are nevertheless being displaced indirectly by a number of technologies

I just finished reading an interesting book, “The Second Machine Age” (1) which described how technologies displaces people by allowing reorganization of businesses so fewer people are needed. This is a form of oblique displacement, and explains why those corporate middle managers, making six figure incomes, got laid off. No machines or technologies were developed to deliberately replace them, it was just a consequence of a number of technologies. However, this is changing too, with a new artificial intelligence technology called Watson. If you Google three words … IBM, Watson and Jeopardy you will find a recent revolution in artificial intelligence, a machine named Watson that went against the two very top winners of the quiz program Jeopardy and beat the pants off them. The AI technology is now available to the commercial and medical communities, including television ads promoting sales of these systems. H & R block is now using this technology to prepare income tax returns.

The reality of today’s kids, the millenniums, is they are getting the worst deal since the Indians sold Manhattan for twenty-four dollars.

Our school systems have completely failed to provide the education necessary for the twenty-first century, continuing to prepare America’s youth for my world, the mid twentieth

century, a world already faded away and gone. They now live in a world which every few years, they must reformulate themselves for a new job … a new career field, and those who can’t are left behind. Therefore, the only real answer to technology displacement is education– the real education of the math and sciences which gives an individual the solid foundation to be able to continually reformulate themselves to continue a career.

No doubt, today’s youth are facing an uphill battle if they are to have any economic or financial future.

1.“The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies”, Erik Brynjolfsson, Andrew McAfee, W. W. Norton & Company, New York, 2014

A Second “Dances with Wolves” Movie? Will the Plight of the Millenniums Result in Their Own Dances With Wolves Movie After The Fact?

education pic

By: James Lyman BSAE, BSEE, MSSM 

While watching the hit movie “Dances with Wolves”last night with my wife, a great movie we’ve watched a number of times, I found myself wondering if in the future, there won’t be similar movies made about the plight of today’s youth … the millenniums.  While loaded with enumerable historical faults, its central theme is the plight of a people who are technologically far behind another people and consequently unable to make contributions to the advance society.  Although it presents a very romantic and idyllic image of hunter- gatherer life, it does illustrate the harshness with which a technologically advanced people tread on primitive backwards people.  Dances with Wolves isn’t unique in this theme, for the later hit movie “Avatar” also portrays the plight of a lesser technological people when meeting a more advance people with the same result as a century ago in America.

The Emerald Forest is another such movie that comes to mind, this one dealing with the natives of the Amazon forest having to confront the modern world. While popular culture has come to view the displacement of the Native Americans as a single unique tragedy in human history, in reality, it’s happened before the Native Americans and after, indeed it continues today with Isis, Taliban and Al-Qaeda.

Technology continues to advance exponentially by doubling every fifteen years.  To better illustrate this growth, if you were to take the growth rate of technology in 1855, when so many of the technologies we enjoy today were coming into being, and it was to grow at a constant linear rate, it would take a little over 25,000 years to reach the level of today’s technology.  It would be the year 27,376 AD to reach the technology of today, the year 2016.  That’s exponential growth!

The trouble is– the millenniums … and most Americans for that matter, who haven’t personally advanced anywhere near that amount.  Indeed, most are somewhere in the nineteenth century– at best!  In 1903 (which for linear growth of technology would have been the year 1978), the Wright brothers archived the first heavier than air, powered flight of a man, their only formal education being high school.  But at best, and a lot of the academic test scores say different, the high school student of today is no better educated than 1903.  The net result is so many Americans are less and less prepared for the modern technologically based society they live in. Like the Indians of “Dances with Wolves”, many Americans are a primitive people unable to make any substantive contributions to our society as typified by the 20% to 25% college graduates who are under or unemployed.

With the first oil crisis in 1973, the shrinking manufacture sector suddenly crumbled into the “rust belt” as manufacturing fled American shores for foreign opportunities.  Suddenly, large numbers of highly skilled people (mostly older) where made obsolete to be tossed onto the scrape heap of humanity.  Faced with this dilemma the government decided that the service economy (hyper-consumerism) was the wave of the future and the answer to obsolete people. American’s value to society would be as consumers supporting other consumers, who in turn would support other consumers.  The need to create real material wealth was now obsolete and no longer needed.  With that, the need for the young to advance technologically came to a stand still, where it remains today.  After all, if all you’re going to just be a consumer working to support consumerism, why would you need to think and understand?  Why would you need or desire to understand the world you live in?  But yet, in order to make substantive contributions to society, these abilities are exactly what a person must have.

With World War II, Americans worked long and hard together to create a new economy to defeat the Axis forces, which after winning the war they continued building and shaping the world we now live in.  That is, until my generation came of age with rebellion against the establishment and our counterculture movement with all its idealism, which soon faded.  That sprit of building and advancing just faded away to be replaced with people only wanting to make money to buy the illusion they have value and worth.  The hyper-consumerism economy of the new America.

The fatal flaw with hyper-consumerism is it must have lots of cheap plentiful resources, in particular the oil as we saw with the 2007 spike in oil prices, in order to survive.

Today’s millenniums find themselves like a polar bear far out to sea on an ice float as it drifts south with the warm waters of technology eroding their little world until they are left to drown. The question is will all these millenniums placidly sink into oblivion, or will a few resist being displaced by a technological advanced people like the Native Americans in Dances with Wolves or the Navis in Avatar?

Will they too choose the hopeless struggle, even knowing the hopelessness of their resistance and the finality of the outcome?  Will they too suffer through the trials and tribulations of conflict to be left with virtually nothing? And if they do choose resistance, will they someday also have their own Dances with Wolves movie in testament and tribute to their lost world.

And if you don’t think technology displacement is a problem, then just watch the school teachers.  In ten years they will all be gone!

 

 

$15 Minimum Wage … YES!!!!!

 

Why An Engineer Supports A $15 Minimum Wage And Why

                           Millenniums Should Worry!

 

 

 

baxter robot pic

By: James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

 Podcast: https://soundcloud.com/economic-financereport

The latest hot button topic of the social activists and now the sixteen election, is to make the world a better place for humanity by nearly doubling the minimum wage. As an engineer and technologies, I say YEA!!, because it will mean more work for my brethren. As so often the case of social activist, they look at the world in a very simplistic way, almost with the innocence of a child, considering that if they can raise the amount the bottom strata of workers are earning, then with more money to live on, their lives will be much improved.

But with just the threat, employers of minimum wagers are already looking for new technologies, with the new industrial robot Baxter by Rethink Robotics being a prime example. Introduced in 2012 and costing just $25,000 to buy, it’s unlike conventional industrial robots with its ease of use, with Baxter not needing computer programmers. A worker can pull the robot’s arm through the desired motions to program it without any need for technical skills or knowledge. For the present minimum wage of $7.25 per hour plus say 30% burden (workman’s comp, insurance, etc.), this makes for $9.43 an hour. For the $25,000 cost of a Baxter robot that calculates out to 2,651 hours of minimum wage work, which is about one and a quarter years of work. After that, it’s essentially free labor. Double the minimum wage, and you half that “break-even point” to about nine months.

Doubling the minimum wage will only increase the demand for more machines like Baxter, to replace those more expensive humans. And that demand means more work for engineers, computer programmers, electronic and mechanical technicians … which means more money for my brethren. But technology isn’t waiting for the minimum wage to be raised, for businesses are already looking for and experimenting with new technologies to reduce their labor needs. Already, there are kiosks for freshly made foods such as pizzas. Fast food restaurants such as

Taco Bell are experimenting with using smart phones and the internet for people to make their orders thereby reducing the need for people to man the front counter. The big box stores are experimenting with using arrays of video screens to display merchandise instead of stocking shelves. The customer will use their smart phones to put merchandise into their “carts” which is in the back storage area where semi-automated warehouse technology is used to actually fill that cart. Using their smart phone, their purchases are already paid for when the cart is brought out to them. Over the years, ATMs have replace the number of bank tellers needed, and now personal computers and smart phone apps are further reducing the need for tellers.

But there is a second major dimension to this proposal, which as you might expect, isn’t considered by any of the advocates for doubling the minimum wage. What happens to the skilled and educated workers already make $15 an hour? Will their pay stay the same? Will they be satisfied making the same amount as those with very little to no education or skills? Of course not, they will want more. Supply and demand, and our labor (commodity) is something we are trying to sell. When there is a large supply of a commodity, then the price is low. That’s the real problem with those working at minimum wage … there’s lots of them … a large supply of commodity (labor) so a low price (wage). For those already making $15 an hour, they make that because of the education and skills they have, and there are fewer of them (smaller supply) so the price (wage) is higher. We see the same thing with each higher tier of pay scales— shrinking supply, so therefore increasing pay. As you might expect, if the minimum-wagers move up to the pay of those already making $15 an hour, they in turn will move up for more money, which causes the next tier to also move up … and so on, and so on, and so on. Pay scales just shift upwards until the pay strata is equal again. This is called inflation resulting in the devaluation of the dollar.

Net result: the minimum-wagers are right back where they started. No real gains and fewer jobs.

Now why should this be any concern for the millenniums? Well, this is all about the problem of obsolete people and how they are falling further and further behind. It’s a concern for the millenniums because this is the environment they are coming into as evident by the 20% to 25% new college graduates finding themselves either unemployed or under-employed. Increasing pressure to raise the minimum wage, while a benefit for the people of technology, puts pressure for further advances in automation and therefore technology displacement. Increasing minimum wage increases obsolete people. This is another sign of how millennium’s future is slipping away. The world of their parents and grandparents continues to slip away leaving millenniums in a desert of job opportunity because the automation and technology displacement doesn’t just center on the low strata of jobs, it’s all up and down the labor strata. The driving force in this new economy is the basic axiom of automation:

Any time you can reduce the intellectual or skill level of a job, you reduce your labor cost.

This applies equally for the lowest minimal pay manual labor job to the highest levels of skill such as medicine or law. The minimum wage is a simple form of a cartel, and cartels are dynamically unstable systems, it’s very hard to maintain control over a segment of the economy. Just look at OPEC and how their members continually act in their own self interest, nullifying much of the power and control of OPEC. However, the real revelation is how ill prepared those

who govern us are, those who seriously propose doubling the minimum wage, who have so little understanding of the twenty-first century world. This is the real reason why the millenniums are falling out of the social-economic system— so many of those who are charged with governing us are themselves so very far behind and ill prepared to lead us into the twenty-first century. They have so very little understanding of how their world really works as typified by proposing doubling the minimum wage as the way to close the wage gap and expecting no repercussions.

And the millenniums are the ones who are paying the price for these leader’s deficiencies.

Economic & Finance Report has great podcast check it out today……..Podcast: https://soundcloud.com/economic-financereport

 

Millenniums and Sunshine: Millenniums Struggle to Find a Place in the Sun in Today’s Economy 

 

Happy college students studying together on university campus. Horizontal shot.

By: James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

I’m reading Gordon’s new book, “The Rise and Fall of American Growth”, which makes the statement, “The historic decline in infant mortality centered in the six-decade period of 18901

1950 is one of the most important single facts in the history of American economic growth”. In

other words, there were more young people, and that resulted in more economic growth for that

period.  For the twentieth century, the youth of America has been the prime market segment of

growth for our economy which businesses vigorously competed to capture.  That’s new markets … and that’s growth!  Each new generation met expanded markets and created new markets.

Until the turn of the century, that is!

So what HAPPENED!!

So why aren’t the millenniums enjoying the sunshine of prosperity as earlier American

generations did … that my generation certainly did?  Quite simply, my world, the world of

parents and grandparents for millenniums, has slipped away and die.  It’s simply gone … never

to return.  In my recent blog, “The Intersection of Jobs – No Jobs”, I explained how since the start of

the new century, technology is no longer creating

new jobs while at the same time research predicts

that technology will displace as much as 47% of

the present jobs.  Adding to this dilemma is the

millenniums continue to prepare themselves for the

world of their parents/grandparents you know …

the one that no longer exists!  In other words, the

environment has changed, but they haven’t!

The basic premise of Gordon’s book is that the 2

Great Inventions occurred from 1870 to 1940, which was the driving force for the phenomenal

growth of America’s economy in this period.  The technological inventions after 1970 didn’t

have the pervasive impact across American society that the Great Inventions did.  That’s when

growth started to taper off.  But one of the inventions after 1970 was small and powerful

computers, and this growing technology was used in machines that began to replace jobs. Slowly at first, then increasingly faster with the net result of people’s income first stagnating

then declining as people were forced to find new jobs that usually paid less.  Finally, creation of new jobs started a steady decline so by 2000, there was no growth.   Millenniums are coming 3

into the new environment of no job growth coupled with displacement of jobs by technology 4

(principally computers) , and therefore an environment of no growth or opportunity for so many

millenniums.

For years, many American’s have been getting the definite short end of the stick, but nothing

compared to what is in store for the millenniums.  While their parents are established with jobs

and extensive work histories to seek new employment if laid off, the millenniums start at ground

zero with limited and diminishing employment opportunities.  For their parents, a college

education was the ticket to higher incomes and greater financial security, while millenniums now

face a 20% to 25% unemployment or under-employment upon graduation and a future filled with

far more uncertainly than their parents or grandparents.

The bottom line is America’s youth, the millenniums, are getting gypped as no others have in

recent history.  The lives they assumed they would have, the same lives enjoyed by their parents

and grandparents, is slipping through their fingers like water, and all they can do is stand and

watch.  Millenniums got their necks stretched out a foot, across the chopping block, just waiting

for the ax to fall.  No one has as much to lose as the millenniums, and this is apparent by no

mention of this problem by anyone in the sixteen election process.  The Government is doing

absolutely nothing about it, with no indication it will in the future.

For the economy in general, there is shrinking market size as millennium college graduates are

unable to find adequate work.  While the college graduate use to be the major disposable income

group which businesses actively sought, the new markets they represent is now shrinking which

means even less growth for America in the future.

The millenniums are signaling further contraction of the American dream.

  1. “The Rise and Fall of American Growth, The U.S. Standard of Living Since the Civil War”, Robert J. Gordon,Robert University Press, 41 William Street, Princeton, New Jersey, 08540, 2016, p209
  1. The Great inventions encompass electricity, running water, sewers, internal combustion engine, telephone,phonograph, radio, movies and modern medicine.
  1. “Race Against The Machine, How the Digital Revolution is Accelerating Innovation, Driving Productivity, andIrreversibly Transforming Employment and the Economy”, Erik Brynjolfsson and Andrew McAfee, Digital Frontier Press, Lexington, Massachusetts, 2011.
  1. “The Future of Employment: How Susceptible are Jobs to Computerization?”, Carl Benedikt Frey and Michael
  1. Osborne, University of Oxford, Oxford, United Kingdom, September 17, 2013

In Ten Years … All the Teachers will be Gone ATS- The Next Coming Computer-Internet Revolution

technology revolution

ATS- The Next Coming Computer-Internet Revolution

Economic & Finance Report

By : James Lymon BSAE, BSEE, MSSM

For many long years, e-learning has been the seemingly unfulfilled promise that is finally arriving.  It is slowly seeping into the general classrooms, starting from the top in the collegian arena, but making steady progress down the pyramid of the American education system.  You may remember about two years ago, news stories about a teacher in Illinois who got transferred from a highschool where she had taught for years, to a middle school.  She then brought suit against the school district claiming she was allergic to children, trying to force her return to the highschool.  I heard only one report that gave the crucial fact of the case.  A language teacher of French and Spanish, she had been displaced by technology- the highschool deciding to teach languages over the internet. 

 

Colleges and universities have become rife with online courses as institutions seek ways to reduce their operating cost, with claims that 40% of college courses are now online.  Some universities have degree programs obtainable exclusively online, students never stepping foot on a campus.  And we can expect the same thing to happen in public schools as they too seek ways to reduce their operating cost.  But ATS promises to give more than cost savings, for the system can easily be designed to adjust the amount of teaching to individual students, making it something of a tutor.  So if a student is good in math, but has trouble with English, then the system automatically spends more instruction time on English and less on math.  This allows each student to progress at their own pace.  Using a Socratic emulator of continual question-answers, ATS holds the attention of a student, thus being far more effective at teaching than the traditional mass lecture system.  By using a series of questions, the machine leads the student back and forth over a concept or principle until the student discovers it, and self discovery is the best way to learn.  You always remember what you discovered for yourself.

 

Nevertheless, there is a ton of money to be made, just as with previous computer/internet revolutions.  And whoever gets there first will have a licences to print money.  The problem is no longer the technology, it’s now a marketing problem.  Once the marketing model of cable and satellite television is adopted, then the market will take off like the proverbial scalded cat.  When a sales rep can go into a school board and say, “Clear everything out of your classrooms.  Save it, give it away, burn it, sell it, store it . . . make fish blinds out of it . . . we don’t care!  We will come in, set up our individual integrated learning stations, cubicles and chairs, each with a computer and video screen.  Then wire each together to local servers and monitor computers for room monitors, and connect the system to the internet … and it wont cost you one red cent.  And while you are now paying $750, $950 or $1150 per student, per course, per semester, we will charge you $250, $350 or $450 per student, per course, per semester.”  Once the courses are built, there will only be some small software maintenance cost and with furniture and computer equipment good for at least ten years, the breakeven should come quickly, meaning the cost to the schools can only come down more.

 

In new product development, the domineering question for marketing success is the unfulfilled need- what need is there for a product that people are willing to spend their money on to fulfill this perceived need.  Therefore, the question for ATS as a viable product is exactly what is the unfulfilled need to be fulfill?  To answer quite frankly, if not brutally, it’s years of chronic nonperformance of America’s public schools, as typified by America’s ranking of academic achievement relative to other western nations.  These numbers are so often quoted in news reports that I won’t bother giving specific numbers, other than America ranks in the mid twenties to the thirties with other developed nations. 

 

Today, the first 12 years of school are largely a waste, graduates simply unable to get a job because they are so poorly educated, while job nonperformance (the teachers) has always been a major incentive for automation.  When an industry can’t get a job or task done correctly and in a timely manner, business starts looking for a machine that can.  This nonperformance is the unfulfilled need of the market.

 

Another factor is the staggering cost which several states are now suffering, which has reached the point where state governments are looking for any means of relief.  States are facing financial crisis in part because of their expensive, yet ineffective school systems swallowing up scare dollars.  More and more states are desperately looking for any solution from their fiscal dilemma, leaving state legislators facing money shortages and threats of having to raise taxes again.  That’s when they start looking for any solutions that will get voters off their backs.

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As is so often the case with government institutions, they have forgotten the golden rule of the marketplace:

 

Take care of your customer or somebody else will

 

This market is over primed and ready for exploitation as few markets have ever been.  It’s the 1848 Sutter’s Mill, waiting for someone with “pick and shovel” (resources) to see the yellow glint of gold in the stream, then just start shoveling it out.  It’s the 49’ers Gold Rush of the twenty-first century, with ATS not only doing the job cheaper, but doing it much better.

Somebody is going to get very, very rich!