NEW YORK — After creepy elements inside North Korea suddenly humbled a Hollywood powerhouse via cyberspace, Americans should think more clearly about how technology will affect our highly leveraged nation in the months to come.
It is an article of faith, even dogma, that science improves daily life for those who embrace modernity and inhabit this tightly connected, shrinking planet. In America, and especially in the public sector, it is also widely accepted that high debt levels are not dangerous when interest rates are low.
But do the available economic data truly support reverence for stampeding recklessly into the digital future, while America carries a veritable debt mountain?
If you believe the U.S. government and our extraordinarily powerful central bank, you cannot possibly conclude Americans are better off now financially than we were generations ago (technologically speaking) in 2000, the last time the speculative bubbles popped.
During 2000, the most meaningful tally of employment levels in the private sector — “full-time-equivalent employees” — reached 104.3 million. Of these, 17 million were in the high-impact manufacturing sector, while just 3.4 million were in the information sector (broadcasting, telecommunication, motion picture and sound recording, software, and publishing).
By 2013, full-time-equivalent jobs increased by a puny 2.5 percent to 106.9 million. However, manufacturing jobs declined 30.7 percent to 11.7 million, and information jobs declined 25.7 percent to 2.5 million.
No doubt, technology permitted these productivity improvements, but is America truly better off replacing human labor with machine labor? Though politicians and their enablers will strenuously disagree, nations that operate in structural deficit can only appear to create economic value for as long as they attract gullible lenders.
In contrast to the slow growth in private sector job levels, combined debts across all sectors in the American economy have soared beyond control.
At year-end 2000, financial enterprises, households, businesses, and governments had $26.3 trillion in borrowings.
By year-end 2013, our borrowings had more than doubled to the staggering level of $53.7 trillion.
As machines and ever more competitive technologies take jobs and incomes away from private-sector employees, how will America service and eventually reduce our mammoth borrowings?
Unless solar flares or other phenomena somehow fry and dislocate our trajectory, technological curves are certain to press hard against all humans who need jobs and incomes to survive.
Mexico’s Carlos Slim, one of the world’s most successful industrialists, believes we should start preparing for a three-day work week. Unlike the economically illiterate political class, Mr. Slim does not envision paying employees the same amount for working 40 percent fewer hours; he imagines, properly, that incomes for most humans will likely drop.
Other noted thought leaders and futurists also fear what may happen, especially to disconnected and uneducated humans, as technology races ahead. Futurist investor Ray Kurzweil and others have long warned how rapidly and pervasively life will change in coming phases of the evolving machine age.
In contrast, President Obama’s official position that improving technologies will inevitably benefit Americans is, predictably, replete with platitudes.
If you work in the public sector, perhaps it is true that cheaper, more agile, and more powerful machines will make your jobs easier to perform. Union contracts and the burgeoning regulatory state bequeathed to us by the Obama administration may create job security for legions of government workers.
But which is more dangerous to your economic health — artificial intelligence or the lack of intelligence?
Experts who ground themselves in fundamental analysis understand that America is approaching a “tipping point” — shrinking incomes turn debt into financial weapons of societal destruction.
Robots are rising, but they will not pay off America’s monstrous debts. That burden falls to humans who, sadly, will struggle and likely fail to keep pace with their technological rivals.
• Charles Ortel serves as managing director of Newport Value Partners (NewportValue.com), which provides economic research to executives and to investment firms.
• Charles Ortel can be reached at firstname.lastname@example.org.
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