Increasing your odds of surviving the corona virus by taking advantage of online services

Back a few days ago I pulled together a list of several online resources for an older friend of mine who really wanted to stay home as much as possible. While that friend was reasonably computer savvy, they weren’t aware of the many online applications that I just take for granted. They thought they only way to accomplish certain tasks was the old fashioned way: leave the house and go meet people.

Many people are already aware of the bulk of this information. But I’m also guessing most of them also know others who might find this information as helpful as my friend did. Since many of you probably don’t have the time to write something like this up on your own, I thought I would save you some trouble and also post it here. Feel free to use, edit or ignore these suggestions as you see fit.


As you know, everyone should avoid going into a physical grocery store as much as possible. Given the crowds that visit daily they are quite risky and will become even more so in the near future.

While grocery delivery is the ideal solution, it isn’t available in all areas. Even where it is available, many stores are booked out a week or more.

But many of the larger chains like WalmartTarget and HyVee also offer curbside pickup. In most cases all you do is order and pay online and then schedule a time to go pick things up. While same day pickup isn’t always possible, it usually isn’t too tough to schedule something for the next day. This is particularly true if you do your shopping earlier in the day.

In most cases you just drive to a designated spot in the store parking lot and check in either via an app, text message, or call. Someone will then come right to your car and put everything in your back seat or trunk for no charge and with little interaction (you typically just stay in the car).

Even many non-grocery retailers are now offering curbside pickup.


Most insurance plans offer at least some type of online pharmacy that will mail you your prescriptions. Typically it is either Express Scripts or CVS Caremark. They are not ideal for things you need right away, but they work well for things you take everyday.

If you are taking mostly fairly common generic drugs, Health Warehouse often works easier and is sometimes even cheaper. Health Warehouse doesn’t take insurance, but their standard prices are often the same or less than the copays charged by many insurance companies.

The main downside to most of these services is that it takes a bit of work to get them setup. Typically you need to call your doctor and have them send the pharmacy your prescription. While this is typically done electronically today, the whole process can take a few days depending on how quickly your doctor responds. So don’t wait until the last minute to order.

Keep in mind you can always use an online pharmacy for everyday medications and a local pharmacy for things you need quickly. In addition be aware that many emergency rooms and urgent care facilities now have pharmacy vending machines where you can fill a prescription at any time. These can be particularly helpful if you find yourself making a late night e-visit with a doctor.

Medical services

With clinics and hospitals now directing most of their attention to Covid-19 patients, getting a physical appointment with your doctor is now difficult if not impossible. If you aren’t aware already, most facilities are now encouraging their patients to use their e-visit services to get advice and prescriptions for common ailments. (Gunderson and Mayo)

In addition almost every provider now makes your personal medical records available online. These services also typically allow you to securely email your doctor or their team (because of HIPPA requirements, you typically can’t just use normal email) (Mayo and Gunderson).

If you suddenly need glasses there are also several online options. Here is a review of three of the bigger services. Note that prices for glasses online can often be substantially cheaper as well.

General Merchandise shopping

Amazon is of course the most dominant online retailer. However they are currently also among the most overwhelmed. As a result, you may want to try some other options depending on what you need. Take a look at places like Wayfair (furniture, appliances and home goods), Newegg (computers) AliExpress (everything) and (window coverings). A few traditional retailers like WalmartTargetHome DepotLowesMacy’s and Gap also have good online storefronts.


Almost all banks now have advanced forms of online banking if you aren’t already taking advantage of them. Most even allow you to deposit checks just by taking a picture of them with your phoneOnline bill pay of course is pretty much a no brainer (never mail a payment again). If you still get paid a lot in cash, some ATMs will accept cash deposits as well as checks (usually limited to the ATMs at a bank’s physical branches).

BTW because handing over cash usually involves fairly close physical contact (particularly at stores), try to avoid paying people this way (while the risk to you is low, the risk to a cashier is greater). In stores use a credit or debit cards whenever possible. When paying individuals, anyone with a bank account can usually be paid via Zelle (check your banks app to see if they offer the service – many banks do). For other situations consider Venmo or Square Cash.

That said be aware that for many smaller financial institutions the online banking experience can seem like a bit of an afterthought While most offer the basics, the services often aren’t as polished or easy to use as those offered by larger banks or online-only institutions. Most people won’t have a problem and the software at most continues to improve. But if you are ready to switch banks, here is a list of some of the better online institutions.


Many people don’t realize that the post office lets you do almost everything online. You can even schedule to have your packages picked up or get emailed pictures of everything the post office will be putting in your mailbox. You can get postage and  free shipping boxes delivered to your house and even print out mailing labels at home.

Needless to say, UPS and FedEx also offer similar services.

Will Tesla do it alone?

There is an assumption many make that it will be impossible for one company to electrify our transportation system alone. It is accepted as common sense that at some point the legacy auto makers will jump in to close the gap. It is presumed that eventually, once electric cars can better compete with gasoline powered vehicles, that the automakers will hit some magic switch and start making electric cars enmass.

I admit that at one point I found the argument compelling. But with the cost of electric cars dropping rapidly and the the legacy manufactures still not making any substantial moves, I’m no longer sure we should be assuming this will be the case. What I am slowly beginning to suspect is that most of them may simply not be financially able to make this transition.

What Tesla is making increasingly clear is that building an electric car is different than building a gasoline powered one. It requires a different supply chain and different production lines. In particular it requires a huge up front investment in battery and electric motor production and software. There is some overlap in things like car interiors and body panels, but that is not where most of the value lies in any vehicle – electric or otherwise.

Production lines for these things requires more than just big buildings. It requires new tooling and hiring staff with specialized skills. Indeed trying to retrofit existing plants may actually be more expensive than building new facilities. Needless to say all of this is highly capital intensive. It will require either borrowing loads of money or selling tons of new equity.

Here is the problem. Many automakers are already up to their eyeballs in debt. Debt that was borrowed with the intent of paying it back with the profits from gasoline powered vehicles. Indeed many of the automakers are not even using current profits to pay back debt. They are using it for dividends and share buybacks and are borrowing even more money to fund current operations. Operations that will soon be mostly worthless.

The only automobile profits that will exist in the near future will mainly come from selling electric cars. But the legacy automakers have yet to even start acquiring the capital to build electric cars. Perhaps we should consider it is because no one will give it to them.

Remember electric cars won’t add to the bottom line of legacy manufactures. They will at best just replace current revenue. This means that the future profits from new electric cars will not just have to pay back the new investor capital needed to build these things, it will also have to payback the billions currently owed. Debt that will typically have to be paid off ahead of the new investors.

In other words, if you had substantial money to invest to build electric cars would you give it some someone like Ford who already owes huge sums and who will soon have to make huge write-offs on things like internal combustion engine plants? Or would you rather give it to someone like Tesla who has proven they can build great electric cars and who have none of the overhead of soon to be worthless legacy assets and the debt that was used to acquire them?

I agree that over the long run Tesla probably won’t be the only company who will produce electric cars in the future. But I expect the others will more likely be new companies built from the ground up than a current manufacture of gasoline powered cars. Indeed I’m no longer convinced legacy manufactures will survive long enough to even face a Tesla competitor.

Perhaps one or two legacy manufactures have enough capital on hand to pull this off along with the guts to write off almost their entire current asset base. But if they exist, I have yet to identify them.

Capitalism vs. Socialism: Toward building a new model to describe our economic world.

A response to Overcoming Individualism by Matt Hartman, Co-chair of the North Carolina chapter of the Democratic Socialists of America

I’ve been following the actives of the Democratic Socialists of America for several months. While I am definitely sympathetic to the values and aspirations of the organization, I have been less impressed with its strategy and vision for the future. Based on Matt’s article, I suspect its leaders are beginning to have similar reservations. But it also appears to reveal that its leaders are still struggling to grasp the nature of the problems the nation and its members are facing. In my opinion what they haven’t yet recognized is how substantially our world has changed. They don’t yet see that a 19th century solution simply won’t solve our 21st century problems.

What people like Bhaskar Sunkara don’t recognize is that the reason most people are “not being drawn to the movement as workers” is because the very concept of “worker” in the traditional economic sense is disappearing. What he and others don’t seem to see is that this change is a big source of much of the social discontent spreading throughout the developed world. The transfer of wealth from workers to capitalists is real (probably more real than what it was in the 19th century), but the causes are much different.

What needs to be recognized is that the concept of “labor” or “work” from an economic point of view is just another resource used in the overall production process. It is an expense to be minimized. Strictly speaking it is no different than any other resource like coal, grain, iron or silicon. Also like these other physical resources where multiple different materials can be used to solve the same problem, human effort isn’t the only possible source of “work”. Much like the production process can be engineered to eliminate a resource like fossil fuels, it can also be changed to reduce and even eliminate human effort.

Now the automation of human labor has been happening for centuries. But as I have pointed out before and what most people have failed to recognize is that for the most part we have only been automating and augmenting one aspect of work – physical effort.

But work involves more than physical effort. Any productive actively also requires intelligent direction that has typically required human cognitive effort (what most people call thinking). But it has always been extremely difficult to automate this aspect of work and so human beings have remained essential to the production process. Until, that is, we developed what Steve Jobs liked to call “a bicycle for the mind”.

Think of it this way (and I suspect most employers probably already are):

Imagine all the world’s workers have banded together and formed a company called Workers, Inc. Workers, Inc. sells labor to companies throughout the world. It sends humans to them to perform services and collects payment for that work (the company’s revenue). The humans that Workers, Inc. sends out need to be maintained and taught in order to be productive. So the company spends money to feed, house, repair and educate them (the company’s expenses).

The company is profitable and growing. While it has always competed with machines for physical labor, until recently it had a monopoly on the market for cognitive labor.

But a competitor has appeared. Intelligent Robots, Inc. is now offering its services to the world’s businesses. Its robots currently don’t work quite as well as the humans provided by Workers, Inc., but they are typically cheaper, work longer, are often easier to operate, can do things the humans can’t and are improving rapidly. Workers, Inc. is still competitive for most tasks, but it is being forced to drop prices for several services. It has also been forced to spend greater and greater amounts of money on education which is reducing profitability.

To make this a little more interesting now imagine both these companies decide to issue an IPO. You are an investment manager of a large hedge fund. The bankers representing Workers, Inc. and Intelligent Robots, Inc. approach you about buying shares. How would you view these opportunities? What do you think about their profit potential? What are their risk profiles? Would Workers, Inc. be a great widows and orphans stock? Is Intelligent Robots, Inc. just a risky startup? Would you buy one or the other, both or neither? Would you short either one? Do you think both companies will be around in 25 years?

I would argue you can already make this choice. Whose stock would you rather own, Amazon or Walmart; Tesla or GM? Wanna take a guess on which of these companies are most likely to be doing a couple of trillion in revenue in 25 years with only a handful of employees?

The bottom line is the concept of a “workers paradise” obviously doesn’t make a whole lot of sense in a world without workers. Because of this I view both capitalism and socialism much the same way I view Newtonian physics. Neither is wrong per se so much as they are an incomplete view of how economic production can work. Like Newtonian physics, capitalism and socialism are a set of social rules that work well within the bounds of certain parameters. In this case they both work as long as we assume human effort is required for our survival.

But once you push outside those boundaries the rules no longer apply. You need new rules to deal with the new environment. For the first time it may be possible for humans to survive without working. We are moving from a world of scarcity where a great deal of brute force was required to make anything of significance to one of abundance that requires little from us.

This could be wonderful. But it will only be wonderful if we all agree that everyone is entitled to this future. This is the fight I think we need to be having (and the battles for “Medicare for all” and a UBI are a great start). If we don’t I think there is a very real risk that this future with slip through our fingers in a series of senseless battles over rules and values that are no longer relevant (e.g. socialism vs capitalism, left vs right, etc.).

Like physics during the 20th century, society needs to develop a new model (or explanation) of how our economy works and then figure out how to base our solutions on it. Our economy is much larger and becoming increasingly more complicated than it was in the 19th century. We need the economic equivalent of General Relatively and the Standard Model (an understanding of which was needed to enable technologies like GPS and semiconductor manufacturing).

My guess is that at least parts of this new model already exists although we haven’t recognized and accepted it yet. But before we can accept the new model, we need to recognize the limitations of the old ones.

We need to stop looking to Marx or Smith, as brilliant as they were, for solutions to our current problems. Their solutions no longer scale. Our world is a 1000 times more complex than anything they could have possibly conceived. Personally I would begin by looking to people like PikettyRaworth and Kelly who I think have captured aspects of the new model. But I have yet to see anyone who has pulled together all the pieces and would encourage the search for others.

Finally, to circle back to Matt’s article, I would like to point out that the rapidly changing rules of our economic game cuts sharply across almost all racial, cultural and political lines. Anyone whose survival is based on their own employment or the employment of others (e.g. children and Social Security recipients) is at risk. If we continue to divide against each other in a desperate attempt to preserve our own positions, we will all lose. This, in my opinion, is the common ground on which to unite not just those on the left, but the entire nation. At this point I don’t think we have much choice.

The Decline of Brick and Mortar Retailing

As I’ve discussed earlier, I’m seeing mounting evidence that eventually machines will replace all economically significant human labor. But while I suspect this will happen relatively quickly (at least from a historical perspective), it won’t happen overnight or all at once.

It also won’t happen evenly. Some fields and industries will eliminate large numbers of workers relatively soon while others will hang on and even expand their numbers for many years to come.

One of the ways I look at this is by imagining the production path, from raw materials to finished product, of an item that I might want to buy.  All along that path humans are involved to one degree or another. But gradually, at each step along the way, human labor is slowly being squeezed out of the process as machines replace our effort.

Eventually what we will create, for all intents and purposes, is the equivalent of Star Trek’s replicator. To obtain a product we will punch a few buttons on our phone and, without any human involvement, it will appear at our door.  This could be a wonderful development.  But this will only be the case if everyone has access to those buttons.  Unfortunately I have real concerns that we may be building a world where only a few will be able to use them.

This process of replacing human labor has been slowly happening for decades in many different ways.  But things have begun to change rapidly and it has become impossible for one person to track all the different developments.

While I try to watch events in many different fields along multiple different supply chains, I find myself currently focusing on three in particular. These three – the introduction of self driving vehicles, the replacement of fossil fuels by solar energy and the rise of online shopping – are what I view as the coalmine canaries in the process of automating our economy.  I’ll address the first two in other articles, but in this one I’d like to focus on the decline of brick and mortar retailing and its replacement by online shopping.

Whenever a given industry is first disrupted, people often find it difficult to believe that it could be entirely replaced.  You will often see statements, typically made by those working in the declining industry, like the following:

There will always be a need for X.   It will never completely go away.

Needless to say brick and mortar retailing is no different.  People often fail to recognize that the winds have suddenly changed direction before it is too late.

What has changed and is driving the push toward online shopping is the same force that drives most other economic changes: cost.  Because of automation, online retailers have simply developed systems that can get products to consumers cheaper and more efficiently than brick and mortar retailers.

In addition it isn’t just the final price of a given item that makes online shopping cheaper for consumers (although that is a big part of it).  It’s the entire shopping experience that has become faster and more efficient.

For example most shopping endeavors begin with researching what to buy.  In the past, depending on the product, this could be a lengthy process.  It often involved talking to friends and relatives, reading books and magazines and ultimately traveling to multiple stores to find exactly what you need at the lowest possible price.  It was an extremely inefficient process.  Most people simply didn’t have the time or resources to examine all possible alternatives and often settled on a less than ideal product at a greater than necessary price.

Online shopping is changing this process.  It is rapidly condensing the research process from  hours or even days to in some cases minutes.  It has become increasingly easy to find the ideal product at an optimal price.

And those prices are typically significantly less than what people often pay in a brick and mortar store.  While online retailers have to pay shipping costs, they don’t need to maintain multiple distribution points (stores) or pay clerks and salespeople to help customers.  This means online merchants have a significantly lower cost of doing business and they can afford to pass those savings to customers in the form of substantially lower prices.

The result has been a rapid shift of sales moving from brick and mortar stores to online merchants.  According to the most recent US Government tally, online shopping now accounts for about 8.4% of total retail sales (about $100 billion in the 3rd quarter of 2016). Since the end of the 2008-2009 recession online sales revenue has been growing at a fairly consistent pace of 15% per year (pdf).  (It should be noted that this number includes both online only merchants like Amazon along with the portion of goods that traditional brick and mortar merchants have started selling online.)

But looking at total retail sales is a bit deceptive since this number includes things like automobiles, restaurant meals and building supplies that either can’t, or are not yet, sold online in any significant quantity. A more accurate view would be to exclude those items and look mainly at items typically found in the average mall or shopping center.

In the Government’s monthly retail report this information is mostly captured by two main categories.   The first is a category called “GAFO” (General Merchandise, Apparel and Accessories, Furniture and Other Sales). This includes items sold both online and offline by traditional brick and mortar merchants.  It is identified as government categories 442, 443, 448, 451, 452, and 4532. The second category is what is called “Non-Store Retailers”. This category includes mostly GAFO type merchandise sold by pure online sellers like Amazon and is identified as government category 454.   The total of these categories was about $450 billion in the 3rd quarter of 2016.  This means about 22% of all “GAFO” type items are currently sold online (100/450=0.22).

With online sales increasing at a rate of about 15% per year, this could mean that in about 11 years all GAFO type merchandise will be sold online.  Although even this is probably optimistic for brick and mortar retailers.  Profit margins for a typical retail business are rarely more than 5% (e.g. Walmart averages about 3%).  Because retail store have fairly significant fixed costs, even a relatively small decline in total revenue is enough to make them unprofitable.

Therefore I expect brick and mortar merchants to begin closing stores at a fairly rapid clip. This of course would force even more consumers to begin shopping online whether they want to or not and actually accelerate the growth rate of online shopping. As a result huge numbers of traditional brick and mortar stores could disappear from our cities in as few as 5-6 years.

Why do I think this might be the case?  Lets take a look at a fairly typical shopping mall near where I live.  If we examine their directory (click “Map View” for a clearer look – pdf) we can see that this mall has four major anchor tenants (Macy’s, Sears, JC Penney and Herberger’s) and about 65 smaller locations including a fairly large Barnes and Noble.

Unfortunately for this mall, Macy’s just announced that it is closing their store. Surprisingly they beat Sears to the punch although probably not by much.  It is reasonable to expect Sears will also also close within a year.  Herberger’s, a part of the Bon-Ton chain, has also been struggling for the the last several years.  Finally there are rumors the JC Penney chain may close almost a third of its stores over then next 2 years.

To be fair both JC Penney and Herberger’s could see a fairly significant bump in their business after Macy’s and Sears close.  This means they could remain fairly profitable for at least a few more years.

Although this probably won’t help most of the smaller stores in this mall most of whom likely rely on the customer traffic generated by the anchor stores to survive (in this case at least 10 locations already appear to be vacant).  The survival of Barnes and Noble is particularly questionable.  It is doubtful most of the rest could survive the closing of 2 or 3 anchor stores.

So how long before this mall is almost entirely vacant?  Based on what I’m seeing this could happen in less than 3 years.  If this is the case, I have a hard time seeing most similar malls surviving more than 5-6 years.

Their are a couple of factors that could slow the transition to online shopping.  One thing that I have noticed is that the retailers most impacted by online sellers are those brick and mortar merchants that have traditionally sold their goods at relatively high markups.  Most mall based retailers fall squarely in this category.

On the other hand discount retailers like the dollar stores, TJX and the fast fashion stores like H&M appear to be holding their own.  At least for now, online retailers haven’t yet been able to sufficiently undercut these types of stores enough to make a significant impact.

The problem is the operational model of online retailers is still a moving target (this is particularly true of Amazon). So there is no reason to believe that online retailers won’t continue to expand and move downmarket. But there is the possibility of some type of floor – either in terms of price or service – below which online sellers will never be able to compete.

Although my own guess is that this level, if it exists at all, is probably quite low. Personally the only type of brick and mortar store that I think might have a fighting chance are convenience stores.  But even here I have my doubts.

So how many job will be lost because of this shift?  At this point I have a hard time coming up with an exact number.  But I think we can get some sense of the possible scale by looking at the revenue per employee numbers for different types of retailers.

Currently online behemoth Amazon generates about $550,000 of revenue per employee.  Although admittedly Amazon is more than just a retailer and does business in other areas.  As a result the ratio between Amazon’s retail sales revenue and its retail employees could be significantly lower.  We don’t know because, as far as I know, Amazon doesn’t release this type of information.  Although personally I suspect the actual number is reasonably close and is probably even increasing.

Compare this to current brick and mortar retail giant Walmart.  Walmart currently generates more revenue than the entire online retail sector.  However Walmart gets only about $210,000 of revenue out of each of its 2.3 million employees.  Assuming Amazon’s revenue per employee numbers are roughly accurate, this means Walmart would have to figure out how to either eliminate nearly 1 million employees or double its revenue in order to remain cost competitive with Amazon.

Companies like Macy’s and TJX are even worse.  Each of them is only able to generate about $165,000 and $150,000 of revenue per employee respectively. The only major retailer that appears competitive with Amazon is Costco.  Costco is currently able to match Amazon at about $550,000 of revenue per employee.

As I mentioned, these numbers are just a rough proxy for what is really happening and should be viewed with caution.   But until I can find a study that directly compares the efficiency of online and offline retailers, it is the best I can do.  But if this analysis is even roughly accurate, I don’t think it is difficult to see how several million retail jobs could be lost over the course of the next several years. Online merchants simply don’t need that many workers.

Will our economy grow fast enough to replace those who currently work for brick and mortar retailers?  Based on past history, this is possible at least over the short term. But people working these jobs will likely need to find their new jobs in some other industry (healthcare?).  Unless the total GAFO retail industry more than doubles in size in real terms over then next several years (which would require an unlikely CAGR of 7%-10% or more), there is simply no way the world of online retailing could possibly absorb them.

Happy MLK Day

Ran across a short post by Chris Boeskool that seems appropriate for today.  In it Chris tells a simple story to which I suspect most people can relate.  He talks about going to work one day and suddenly finding himself working alongside someone who insists the people around him always step aside when he is coming through.

Chris comes to realizes how what for many people likely began as a childhood sense of entitlement, can escalate into an adult sense of privilege.  A belief that we deserve some form of special treatment.  A belief that can be quite painful to give up when those around us finally decide they are no longer willing to accommodate it.  For those who fall into that situation:

Equality can feel like oppression. But it’s not. What you’re feeling is just the discomfort of losing a little bit of your privilege — the same discomfort that an only child feels when she goes to preschool and discovers that there are other kids who want to play with the same toys as she does.

It’s like an old man being used to having a community pool all to himself, having that pool actually opened up to everyone in the community, and then that old man yelling, “But what about MY right to swim in a pool all by myself?!”

And what we’re seeing politically right now is a bit of anger from both sides. On one side, we see people who are angry about “those people” being let into “our” pool. They’re angry about sharing their toys with the other kids in the classroom.

They’re angry about being labeled a “racist,” just because they say racist things and have racist beliefs. They’re angry about having to consider others who might be walking toward them, strangely exerting their right to exist.

On the other side, we see people who believe that pool is for everyone. We see people who realize that when our kids throw a fit in preschool, we teach them about how sharing is the right thing to do. We see people who understand being careful with their language as a way of being respectful to others. We see people who are attempting to stand in solidarity with the ones who are claiming their right to exist — the ones who are rightfully angry about having to always move out of the way, people who are asking themselves the question, “What if I just keep walking?”

The only thing I would add is that in the real world these two groups usually aren’t that crisply defined.  The reality is most of us have a foot in each camp.  For what ever reason we all usually have some sense of privilege.  It is usually something that has been a part of us for so long that we just take it for granted.

It isn’t until we suddenly slam into someone who has finally decided that they are no longer willing to be “nice” and just move aside that we are given the opportunity to realize what has been happening.  Unfortunately even then many of us refuse to recognize it.

What the Russian attempt to influence the US election says about our new President

I spent my afternoon reading over the recent Intelligence Community Assessment on the Russian government’s recent efforts to influence the US presidential election.   Most of the report isn’t entirely unexpected.  The fact that the Kremlin has set up an extensive system to spread disinformation in order to advance its own agenda should come as a surprise to no one.  There is a reason countries make significant investments in propaganda.

What I see as a more interesting question is what does the Russian propaganda tell us about our current situation?  Why were the Russians attempting to influence the US election?  What were they attempting to accomplish?

As the report states, Mr Putin clearly has a goal of destabilizing the United States.  Mr. Putin has long wanted to reestablish Russia as a world superpower and part of that process obviously involves reducing the US role as the world’s economic and military leader.  He is particularly interested in driving a wedge between the United States and Europe.  As Fiona Hill stated in recent testimony before the U.S. House of Representatives Armed Services Committee:

The preferred scenario for Russia in Europe, as Putin has repeatedly made clear, would be one without NATO and without any other strategic alliances that are embedded in the European Union’s security concepts. Putin has repeatedly described NATO enlargement as driven by the United States and aimed at bring U.S. military bases and forces up to Russian borders to contain Russia. Although this narrative is flawed, much of the Russian elite accept it as ground truth—and many, including Putin, have done so since the NATO bombing of Belgrade in 1999, and especially since the expansion of NATO to Eastern Europe in 2004. Putin has thus consistently pushed for a renegotiation of European security structures to downgrade the conventional military and nuclear role of the United States and NATO, and give Russia military and security parity with European forces.

Although again none of this is particularly surprising.  The main issue is how does his attempt to influence the election help him achieve these goals?

The ODNI report also states that Mr. Putin had a “clear preference for President-elect Trump”.  Why?  It doesn’t seem plausible that Mr. Putin would simply prefer a Republican President over a Democratic one.  For example would he have also had a “clear preference” for Jeb Bush or Ted Cruz had they been nominated?  This seems doubtful.

More likely it seems Mr. Putin saw (and continues to see) in Mr Trump a unique opportunity to destabilize the United States and reduce its influence in the world.  He saw that for the first time the United States might elect a President who lacked most of the skills needed to govern and decided he needed to take advantage of the situation.

He seems to have quickly realized that Mr. Trump was extremely volatile and polarizing and would probably quickly divide the country.  He also likely soon figured out that Mr. Trump isn’t particularly intelligent and that he has a poor understanding of the world around him (and knows Mr. Trump probably doesn’t even recognize this).  Most importantly, he appears to strongly believe  that Mr. Trump is weak, insecure and easy to manipulate.

Mr. Trump’s response to this report appears to confirm Mr. Putin’s suspicions.  Instead of being horrified by the report, he is trying to downplay it.  Instead of asking for more information,  he is disparaging our intelligence gathering community.  He even appears to see Putin’s activity as a backhand compliment, instead or recognizing how badly he is being played.

Although it is clear Mr. Trump does appear to have one thing right.  Mr. Putin is definitely “very smart”.  I suspect he will have a very productive four years.

No man is so foolish but he may sometimes give another good counsel, and no man so wise that he may not easily err if he takes no other counsel than his own. He that is taught only by himself has a fool for a master. – Ben Jonson


Automation and Inequality

Over the past few month I have become increasingly concerned about rising levels of automation in the US and world economies.  In my opinion it is becoming obvious that human labor will become progressively worthless from an economic standpoint.  At some point in the near future it is clear that almost all tasks of economic value will be done better by a machine than a human.

Some will argue that this will never happen because even though increasing automation will replace some jobs, advancing technology will always create more new tasks than it destroys.  Clearly this is what has happened in the past.  But I have come to suspect that there are good reasons why this probably won’t continue in the future.

Productive work typically involves some combination of physical labor (moving stuff around) and intelligent direction.  Until recently, most machines were really only good at helping us move stuff around.  Humans were still needed to figure out how to move all of that stuff around in a productive manner.

This meant that as machines began making it possible to increase the total amount of goods and services being produced by augmenting human strength, the value of intelligent human effort increased along with it.  This was because every new machine always required intelligent human operators in a relatively fixed ratio and those operators needed to be paid for their efforts.  (Note: the role of “human operator” refers to both those directly operating the machines and all the behind the scenes support staff like bookkeepers and engineers that were needed to keep the machines running.)

But this appears to have started changing about 30 years ago when computers began to be used in the production process as shown below.


This chart  shows the ratio between all compensation paid to employees (mostly wages) and GDP (a measure of the value of all goods and services produced in the US during a year – currently about $18.5 trillion).  You will notice that from 1948 to about 1975, the relative value of employee compensation remained fairly constant at roughly 50% of GDP.  Then it started a slow decline and currently stands at about 43% of GDP.  Assuming my hypotheses is correct, the relative value of employee compensation should continue falling and eventually begin approaching 0% of GDP as intelligent machines like self-driving trucks quickly push humans operators out of the way.

Btw, who pocketed the 7% of GDP that is no longer being used to pay workers?   Need you ask?


What is even more concerning is that fact that in most cases today the decision on how our machines are used is made solely by the owners of those machines.  Until recently this hasn’t been much of a problem because this decision has always been subject to a very significant check.  Since all machines required some form of intelligent human operator, workers always had a say in how they were used.  This was because a significant part of a machines output needed to be used to pay workers.  By necessity the output of any machine had to be shared between the owner of a machine and the people hired to operate that machine.

Those workers of course subsequently used that compensation to trade for the output of other machines run by other workers.  This meant that at least some of the output of our economic system had to be dedicated to the needs and desires of workers as well as the needs and desires of machine owners.

But what happens when humans are no longer required to operate the machines?  What is to stop machine owners from using their machines anyway they wish?  If you don’t need to pay anyone, why produce anything at all for the masses?  Since you will no longer be paying those workers any longer, they likely won’t have any money to spend anyway.  Why not just redirect the machines to create things you and your fellow machine owners want and desire?  Why bother creating houses, cars or other products for the mass of former workers?  Since you own the machines, why not use them instead to build super yachts or mansions on Mars?

If I am correct, at some point soon the value of wages received by all workers will start falling below the total value of the goods and services needed to sustain those workers.  This will likely happen because of a combination of rising unemployment, increasing competition with new intelligent machines driving existing wages lower, and rising costs for basic necessities as machine owners divert more and more resources toward their own desires.  Needless to say the results of this happening are likely to be catastrophic for all but the wealthy.

But this doesn’t have to happen.  There is no reason ownership of the machines needs to concentrate solely into the hands of an economic elite.  This ownership could just as easily be distributed in some way to everyone.

For better or worse I suspect that over the next decade or two we will be increasingly asked to choose the type of post-work future we would like to see.  One alternative could be an abundant Star Trek like future  where everyone’s physical needs are met by a massive, solar powered, automated network of machines (although probably minus the warp drive and transporter, at least for now).  The other extreme, where for whatever reason we currently seem to be headed, is a Galt’s Gulch for the wealthy few who will increasingly redirect the worlds resources toward their own desires.

Note that unlike the past this choice is no longer being driven by the question of fairness. If my analysis is correct, it is now a survival question.  And like it or not, the only way I see to make this choice is through our political process.  If we wish to survive, somehow we will need to come together and figure this one out.

Equality, Community and Fairness

Why the white working class votes against itself – The Washington Post

Why did all those Economically Anxious™ Trump voters reject policies that would have helped relieve their economic anxiety?

Maybe they believed any Big Government expansions would disproportionately go to the “wrong” kinds of people — that is, people unlike themselves.

. . .

We’ve known for a long time, through the work of Martin Gilens, Suzanne Mettler and other social scientists, that Americans (A) generally associate government spending with undeserving, nonworking, nonwhite people; and (B) are really bad at recognizing when they personally benefit from government programs.

Hence those oblivious demands to “keep your government hands off my Medicare,” and the tea partyers who get farm subsidies, and the widespread opposition to expanded transfer payments in word if not in deed.

On one level this sounds about right.  There have been a number of studies done over the years showing that many social animals, including humans, have a sense of “fairness” hardwired into their brains.  If one member of a social group sees others in the group getting greater benefits than themselves it often causes a great deal of distress.  For better or worse we all seem to want what those around us are getting.

This is probably why the social programs that enjoy the most popular support (e.g. Social Security, Medicare, public schools, etc.) are those that benefit the most people with the fewest restrictions.  These are programs available to everyone and have no significant income or “identity” requirements.

This may also explain why the Affordable Care Act is unpopular regardless of whether it is shown to work.  There seems to be a sense that the program is designed to benefit some at the expense of others.  My own suspicion is that politically there are really only two choices when it comes to building social programs to deal with things like health care.  Either the government needs to cover everyone or no one at all.  Trying to save money and only cover those deemed most “needy” just breeds resentment.  For whatever reason it is a lesson the rest of the world (particularly the Nordic countries) seem to have already leaned.

That said, I think we need to be careful we don’t oversimplify the concept of “fairness”.  While lower social animals likely have a very black and white sense of fairness where everyone needs to see the same result, human beliefs about fairness are probably more nuanced.

. . . responding to getting less than a partner is not the only aspect of fairness. For a true sense of fairness, it also matters if you get more. [Dr. Sarah} Brosnan and [Dr. Frans] de Waal hypothesize that individuals [are also] willing to give up a benefit in order to reach equal outcomes and stabilize valuable, long-term cooperative relationships.

In other words humans appear to view fairness as being more than just equal outcomes.  We also seem to have an innate sense that we are “all in this together”.  We will willingly make sacrifices to preserve the long term social stability we need to survive.

The problem of course for “white working class voters” and many other Americans is that they are watching significant economic changes tear apart their communities.  It obviously doesn’t make much sense to work for the common good when that “common good” all seems to be sinking below the surface.  Developing social programs that treat everyone equally is one thing.   Creating programs that help preserve or rebuild our nations declining communities is a much more problematic challenge.

An economic-political divide

Donald Trump lost most of the American economy in this election – The Washington Post

But there’s another divide exposed by the election, which researchers at the Brookings Institution recently discovered as they sifted the election returns. It has no bearing on the election outcome, but it tells us something important about the state of the country and its politics moving forward.
The divide is economic, and it is massive. According to the Brookings analysis, the less-than-500 counties that Clinton won nationwide combined to generate 64 percent of America’s economic activity in 2015. The more-than-2,600 counties that Trump won combined to generate 36 percent of the country’s economic activity last year.
Clinton, in other words, carried nearly two-thirds of the American economy.

Not the first time we have faced an economic/political divide of this scale. Hopefully this time things will end better.

Autonomous driving may be closer than we think

Tesla’s Autopilot chip supplier NVIDIA on new self-driving system: ‘It’s basically 5 yrs ahead and coming in 2017’ – Electrek

On a conference call with CEO Jen-Hsun Huang following the results, analysts were particularly interested in the company’s push in AI and the automotive industry, especially since Tesla’s started delivering every single one of its vehicles with NVIDIA’s Drive PX2 supercomputer.

Huang offered some very interesting insights into how he sees Tesla’s self-driving program playing out.

He says that by introducing the necessary hardware for full autonomy now, Tesla  “sent a shock wave through the automotive industry”:

“And I think what Tesla has done by launching and having on the road in the very near-future here, a full autonomous driving capability using AI, that has sent a shock wave through the automotive industry. It’s basically five years ahead. Anybody who’s talking about 2021 and that’s just a non-starter anymore. And I think that that’s probably the most significant bit in the automotive industry. I just don’t – anybody who is talking about autonomous capabilities in 2020 and 2021 is at the moment re-evaluating in a very significant way.”

Huang continued by saying that autonomous driving is not a “detection problem” but an “AI problem” and he insists that it’s going to be solved in 2017.

As the article notes, Huang is obviously biased. Still his reasoning here seems a little too specific to just dismiss as marketing fluff. It seems the the work of engineering a functional solution is nearly complete. There are still the nontrivial legal and business model problems to be solved and that probably won’t happen in 2017. But it appears increasingly obvious that this is all going to happen sooner than most people are expecting.