You are here
Shellady Ponders Robots, Drones, and the Macroeconomy
Trump has proven to be decisive. The rest of the international community is wrestling with his actions as they digest the news.
Globally, the U.S. is not quite sure where it is going with it all, but suffice it to say, there has been a heightened sense of danger. It makes me think that the world has been a relatively quiet place, all the while we were watching the global central banks drive interest rates to zero. The S&P 500 just finished its least volatile quarter since 1965.
Does anyone think that we are going to continue down that path?
What is frustrating is understanding market-impacting reports such as last Friday’s U.S. Jobs Report. It stunk. Call it like it is.
I am getting more and more frustrated with those trying to ignore it and ‘claim’ that the Federal Reserve is still on track for two to three more interest rate hikes this year. How can they be?
Look at the other data. If 5.0% is technically the government’s rate of ‘full employment’ then a 4.5% number must be a huge win. But it is not.
We still have a record number of millennials living in the basement of their parents’ homes. We still don’t see any significant wage inflation. Why not? You would think that if we were at full employment we would have some employers fighting over workers. But this isn’t the case.
I will admit that for the first time in a while I am seeing a lot of ‘now hiring’ signs, but either they aren’t paying enough and will be perpetually hiring, or there is nobody in the area who is willing to do the work. So, the U.S. economy has full employment and no wage inflation.
The U.S. has full employment and a record number of kids living in their parents’ basement. Something just doesn’t smell right to me.
Meanwhile, I still feel like the world’s leaders are missing the boat on how much of a paradigm change we are going through when it comes to robots, kiosks, and drones.
The latest jobs numbers reflect the retail ice age that we talk about on the Stuart Varney Show almost every day. The more that a $15-an-hour wage is mandated, the more that we will look for other ways to be more efficient and profitable.
It isn’t just retail that will take it on the chin. Transportation and construction have seen changes as well. This is a total shift in the way the economy works and runs.
When we talk about getting Amazapped, we talk about what Amazon is doing to retail. Some would say they are changing its face. I would say they are changing the economy.
As the world becomes increasingly reliant upon smartphones, and that is definitely a trend that can be seen, more and more of our daily transactions will be performed by these devices. I am not a big conspiracy theorist, but think of all the people who have a vested interest in making this happen.
Retailers want to be able to track your every purchase in order to market the things you will like directly to you. Banks love it because we all know they hate handling cash. No pun intended, but there’s not enough money in it for them.
Finally, there is the government. Just think, the Holy Grail in the government’s mind is a totally cashless economy. That way there is no slippage. No taxi cab drivers underdeclaring. No waiters and waitresses underdeclaring. No deals that the government won’t know about and nothing that won’t be in the crosshairs of the Patriot Act. There will be total transparency and total efficiency. Tax receipts will go through the roof and there will be no more money laundering. They are just licking their lips in anticipation.
America will continue to innovate and create wealth – no matter what.
I gave a speech last September in Palo Alto, California, and I could feel the excitement. How about Google and Facebook to name just a few – and oh, by the way, Stanford. These people know that they will have a seat at the economic table going forward. They know that they will be creating new economies, not just affecting old ones. This is where the action will be.
Driverless cars you ask? How about the fact that 29 states in the U.S. list trucking as one of their biggest economic engines? That cannot be good. What will happen to those drivers? What will happen to the insurance industry that facilitates the drivers? Are you starting to see the knock-on effect?
It will not only reshape our economy but it will also fundamentally change our economy.
We have evidence of what happens to economies when we have robots performing a lot of functions for us within retail and outside retail.
Japan has had a declining population for years now and with that, they are seeing a decline in productivity. Using robots in the Japanese economy is no longer a like-to-have, it is a need-to-have. Welcome to the future.
I wouldn’t be surprised to see the immigration issue become a hot topic in Japan in the near future. And what about taxes? How do you tax a robot? I am not sure you can.
Bill Gates has mentioned it, but you don’t really pay a robot do you . . . it just saves you money. Will there be a business surcharge for employing robots? Just think of all the new things we’re going to have to legislate, amend, and worry about when these things come into play.
What I am really wondering about are reports of drones delivering pizza. You laugh, but permits have been applied for already. Maybe now I can have a robot made to eat the pizza, so that I don’t have to gain the weight. Crazier things have happened. I mean, I just saw a commercial that lets you order pizza with your shoes. Seriously? Pie Tops?
I guess I better take off my tin foil cap.