By Columnist Charles Payne
It didn't get much fanfare but there was a story about France and its plans for the "Third Industrial Revolution" that will result in a halcyon nation of zero unemployment through the next leap of machine capabilities and intelligence promises.
The fact that France would make such a pronouncement is laughable but par for the course of a nation that still embraces socialism while acknowledging its economy will soon slip to number nine in the world. So, freefalling economic prowess and collapsing importance can co-exist or support zero percent unemployment?
Tomorrow...we're all Luddites
There is a third industrial revolution around the corner and its going to be amazing.
• Free thinking and agile robots
• Software and logistics that predict and act on the future
• Smart appliances from tools to vehicles
• 3-D printing
I've seen 3D printing up close and it will change the world. There will be a time when it allows anyone to be a designer of anything and manufacturing to take ideas from concept to reality in a flash of an eye and with very little human support. While some are dismissing 3D printing and others are in awe of stuff already coming out of these machines few have spoken about the eventual impact on jobs. Wake up the ghost of Ned Ludd because this was his greatest nightmare. This isn't about replacing humans with weaving machines, it's about replacing everything with machines!
The world has survived two industrial revolutions and mankind was made better, riches have been created, lifestyles have improved and the world kept spinning. The first industrial revolution of the late 1800's in England made mankind dream larger and the second in America (sparked by Henry Ford) democratized wealth and created truly shared prosperity.
Full Employment and Balanced Growth Act of 1978
That was the name of the act resulting from efforts of Representatives Hubert Humphrey and Augustus Hawkins that promised to make an array of economic dreams into reality.
• Full Employment
• Economic Growth
• Balanced Budget
• Limited Inflation
Just think, roaring economic growth that would eliminate joblessness and yet not produce inflation (There are economists that argue zero unemployment would be a nightmare that would increase wages and decrease effort and all the good things that come with it like competition, innovation and greatness). The two key ingredients in this witches brew of legislation are government spending and an even more powerful Federal Reserve. With money printing and government spending, crafters of this law were betting against basic laws of economics and common sense.
While the law states federal government will rely primarily on private enterprise there is no doubt the spirit of Keynes and his love of such intervention are the driving force beneath the surface. It's the reason people in this camp always blink, always jump into the fray, always make a lot of dumb decisions that in the end hurt more than help (think cash for clunkers, which took used cars off the road making those that remained so expensive people had to buy new cars taking on new debt mostly with little to no money down. Think of all the housing actions that prolonged the crisis and resulted in less supply which has pushed up prices so quickly only professional investors and flippers have benefited).
The government is supposed to avoid trade surpluses and deficits, and balance the budget. The law underscored the Fed's role in maintaining long-run growth while controlling inflation. Moreover, it connected the Fed's role to try to echo goals of the executive branch. It was expected this law would have resulted in 3 percent unemployment for adults over 20 and 4 percent for those 16 and up by 1983, while inflation was supposed to hit 0 by 1988.
The Future is Now
Interestingly, this oddly timed and poorly thought out fight for $15.00 an hour minimum wage is happening against a backdrop of rapid changes in low-paying jobs. Recently at the bank the teller removed cash by inputting the amount and a machine spit it out - tellers no longer have to handle cash other than handing it over... how much longer will they be paid for that? What about the self-checkout? Demanding CEOs take lower pay so the guy making Quarter Pounders can get a livable wage is farfetched.
There was a time people were happy for work. It use to be give a sense of encouragement to see Rosie the Riveter getting paid to contribute to a nation, to the pride of women, and a hard day's effort.
Sure, there has been and will be a lot of noise about this topic (some huge rally is scheduled for tomorrow) but protestors had better pay attention to two intersecting shadows over their signs. One will be the ghost of Ned Ludd, still fighting the good fight; the other will be the 3D printer of the future being operated by an agile robot powered by super smart software.
Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.