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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 449343  
Subject: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 9:13 AM
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If true this is a VERY disturbing as it is the middle class that drives the economy & pays the majority of gov't funding which funds already shaky senior entitlements.

This could lead to major political upheavals & population class conflicts.

http://start.toshiba.com/news/read.php?rip_id=%3CDA3VN2EG0%4...

Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.

And the situation is even worse than it appears.

Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What's more, these jobs aren't just being lost to China and other developing countries, and they aren't just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.

They're being obliterated by technology.

Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done.

"The jobs that are going away aren't coming back," says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of "Race Against the Machine." `'I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years."

The global economy is being reshaped by machines that generate and analyze vast amounts of data;.... instead of installing expensive equipment and hiring IT staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.

"There's no sector of the economy that's going to get a pass," says Martin Ford, who runs a software company and wrote "The Lights in the Tunnel," a book predicting widespread job losses. "It's everywhere."

The numbers startle even labor economists. In the United States, half the 7.5 million jobs lost during the Great Recession were in industries that pay middle-class wages, ranging from $38,000 to $68,000. But only 2 percent of the 3.5 million jobs gained since the recession ended in June 2009 are in midpay industries. Nearly 70 percent are in low-pay industries, 29 percent in industries that pay well.


For those who are retired & have retirement savings stock returns could accelerate due to higher profits.
Thanks to technology, companies in the Standard & Poor's 500 stock index reported one-third more profit the past year than they earned the year before the Great Recession.

this trend is not restricted to the US.

European companies had been using technology to replace midpay workers for years, and now that has accelerated.

In Canada, a 2011 study by economists at the University of British Columbia and York University in Toronto found a similar pattern of middle-class losses, though they were working with older data. In the 15 years through 2006, the share of total jobs held by many midpay, midskill occupations shrank. The share held by foremen fell 37 percent, workers in administrative and senior clerical roles fell 18 percent and those in sales and service fell 12 percent.

In Japan, a 2009 report from Hitotsubashi University in Tokyo documented a "substantial" drop in midpay, midskill jobs in the five years through 2005, and linked it to technology.

Developing economies have been spared the technological onslaught — for now. Countries like Brazil and China are still growing middle-class jobs because they're shifting from export-driven to consumer-based economies. But even they are beginning to use more machines in manufacturing. The cheap labor they relied on to make goods from apparel to electronics is no longer so cheap as their living standards rise.
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Author: whafa Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414091 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 9:35 AM
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This is not news; it has been going on since the invention of the loom or before. Until the world decides to "globalize" technology and distribute its benefits to all like in Star Trek, these people are going to have to find something else to do.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414097 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 10:37 AM
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This is not news; it has been going on since the invention of the loom or before. Until the world decides to "globalize" technology and distribute its benefits to all like in Star Trek, these people are going to have to find something else to do.

While the trend is not new. The scale of it is. And the frequency of specific industry middle job loss is higher due the rapidly increased technology evolution. Which means a person may have 3 or 4 careers in their lifetime. Which means much more retraining & cost of that training disrupting their earnings. Which means mebbe people will work til they die.

I'm glad I'm an old geezer that doesn't have to deal with this Brave New World.

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414110 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 12:25 PM
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It is true that computers are replacing people. It is also true that when work can't be done by a machine, companies may decide that that work should not be done. That is what has happened to copy editors and proofreaders, and I'm sure that you all have a dozen other examples of jobs that have been eliminated without any replacement.

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Author: whafa Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414113 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 12:37 PM
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Which means a person may have 3 or 4 careers in their lifetime.

I am 35 and just started my third.


I'm glad I'm an old geezer that doesn't have to deal with this Brave New World.

Oh man, I wish there was a way for me to show you what I see. I have never been more excited for the future in my life. There are advances and great ideas happening everywhere I look. And it's not just corporatism. I see many people moving into more personal ways of interacting and collaborating with each other. More and more of it every day. And technology is getting "softer" as people get better with interfaces. It's a great time to be alive!

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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414123 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 1:08 PM
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<Oh man, I wish there was a way for me to show you what I see. I have never been more excited for the future in my life. There are advances and great ideas happening everywhere I look.>

Whafa, I'm delighted to read this and gave you a rec.

But you have to realize that you are an exceptionally bright guy, able and eager to learn and invent new ways.

Older people and the less educated will be less capable of creating and exploiting future developments. Pretty much every advance, whether economic (industrial revolution) or cultural (women's liberation, the collapse of communism in the U.S.S.R., etc.) hurt massive numbers of people who couldn't adapt to the change.

On a macro level, there will be a lot of hardship until the old way gradually declines and the new way becomes normal. In the Bible, G-d himself kept the Israelites wandering for 40 years after the liberation from Egypt because the older folks weren't ready for freedom.

40 years sounds about right to me. I won't be around by then, but your generation will.

Wendy

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414134 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 2:29 PM
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Older people and the less educated will be less capable of creating and exploiting future developments.


Yep. I just don't see bricklayers, carpenters learning programming skills. There are many on the other side of the bell curve that ain't gonna transition well.

tj-a retired blue collar guy in the middle of the bell curve of intelligence.

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Author: bjchip Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414167 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/23/2013 9:34 PM
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Good for you- Wait until you try to get another job after you've passed the big Four-Zero and the stuff you know has been replaced with a new lot of stuff you have to learn. I've had 5 "career changes" in my 40 years of working life, I have 3 University Degrees, I have re-skilled and re-trained madly and I am one of those (like many here) in the top 5% or so of human intelligence. I started finding it hard after I passed 45, and almost impossible past 55. Yet my family depends on my "middle class" income and I am barely squeaking by.


The future (using the current societal design) belongs to the people who OWN stuff and property... and the rest of us are consigned to indentured servitude or simple slavery. There isn't anything else on offer and the premise "work hard and you will get ahead", on which the whole of our society is based is now (as indicated by the OP) broken.

You MIGHT if you are lucky... but most won't and there's no such promise available any more.

Yet the idea of re-thinking the basis of the society as a whole is something that will make quite a few heads explode.

This change is coming. It isn't going to be an easy one either.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414194 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 9:08 AM
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Yep. I just don't see bricklayers, carpenters learning programming skills. There are many on the other side of the bell curve that ain't gonna transition well.
I am in construction, and I see this as one of the safest areas in the current changing market. These skills cannot be reproduced by programming. Yes to a certain extent my job (project management) can be outsourced, but even then only so much - site visits need to be done, and the extensive "hands-on" nature of it isn't going away entirely.

But the trades? They are still needed. Maybe those bricklayers or plumbers won't rise to be PMs (you need 21st century skills for that), but no one else can do what they do. I certainly can't.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414211 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 10:41 AM
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But the trades? They are still needed. Maybe those bricklayers or plumbers won't rise to be PMs (you need 21st century skills for that), but no one else can do what they do. I certainly can't.

The best of these craftpersons will always find work. But this segment of workers have been hit VERY HARD due to the real estate bubble. I suspect many have been unable to find full time employment in the past 3 to 5 years. I base that opinion on this article:http://globaleconomicanalysis.blogspot.com/2013/01/top-gaini...

The benefit to the consumer is that it is likely that those with marginal skills have been forced from the construction market place to find other type of work.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414212 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 10:46 AM
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I ran across this article this morning:"Practically Human: Can Smart Machines Do Your Job?"

It a long article but worth readingIMHO.

http://abcnews.go.com/US/wireStory/practically-human-smart-m...

Does technology also create jobs? Of course. But at nowhere near the rate that it's killing them off — at least for the foreseeable future.

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Author: Gingko100 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414217 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 11:40 AM
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Construction stopped/slowed because housing fell off a cliff and the industry was filled with speculators who gambled on growth and lost. In the commercial world (which is my world), things kept rolling (albeit slower). GCs scaled back, but didn't stop.

Many GCs on shaky financial footings went out of business, but the good ones remained busy. And even then, one cannot replace a framer. One cannot replace a plumber. If that's what you need, then that's what you need. It's an age old skillset and can't be replaced with new technology.

So yes, the glut of workers in construction was severely impacted. But now that the industry is back to a more rational size and structure, there is certainly work to be had.

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414220 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 12:36 PM
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Wait until you are 61 years old and your job is "consolidated."

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414228 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 1:12 PM
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Wait until you are 61 years old and your job is "consolidated."

Is that the same as redundant?

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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414250 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/24/2013 7:04 PM
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I ran across this article this morning:"Practically Human: Can Smart Machines Do Your Job?"

It a long article but worth readingIMHO.

http://abcnews.go.com/US/wireStory/practically-human-smart-m......

Does technology also create jobs? Of course. But at nowhere near the rate that it's killing them off — at least for the foreseeable future.


I'll agree with that, exactly as stated - but with more emphasis on the word "foreseeable".

After all, the mechanization of agriculture displaced millions of farm workers... who did not jobs doing the same thing that other people had been doing for decades. In fact, a good share of THOSE jobs were being mechanized out of existence at the same time.

No, whole new and unforeseen industries were created. And that's why, in spite of having around a tenth the number of people working in agriculture that we had a hundred years ago (when they were a majority of the working population), we have several times as many people working.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414316 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/25/2013 4:45 PM
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http://news.yahoo.com/smart-machines-create-world-without-05...

Now, three years after Google invented one, automated cars could be on their way to a freeway near you. In the U.S., California and other states are rewriting the rules of the road to make way for driverless cars. Just one problem: What happens to the millions of people who make a living driving cars and trucks — jobs that always have seemed sheltered from the onslaught of technology?
"All those jobs are going to disappear in the next 25 years," predicts Moshe Vardi, a computer scientist at Rice University in Houston. "Driving by people will look quaint; it will look like a horse and buggy."
If automation can unseat bus drivers, urban deliverymen, long-haul truckers, even cabbies, is any job safe?

Vardi poses an equally scary question: "Are we prepared for an economy in which 50 percent of people aren't working?"

It turns out that computers most easily target jobs that involve routines, whatever skill level they require. And the most vulnerable of these jobs, economists have found, tend to employ midskill workers, even those held by people with college degrees — the very jobs that support a middle-class, consumer economy.
So the rise of computer technology poses a threat that previous generations of machines didn't: The old machines replaced human brawn but created jobs that required human brains. The new machines threaten both.


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Author: flyerboys Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 414317 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 1/25/2013 5:18 PM
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Computers replacing humans in much of what we do seems to me to be inevitable and is also What We Always Thought We Wanted (oooops?!): helot slaves that can be exploited with no ethical qualms or civil perils.

Assuming we can restructure our economies to cope (no one starves or becomes destitute from the resulting unemployment but all turn their attention from survival to simply living), the question becomes starkly simple: What is human life for?

The brilliant Hannah Arendt, especially in her book The Human Condition answers:

Labor (which is never-ending, focused on biological survival, and can be done by slaves)
Work (the creating of artifacts -- new things, which enrich private life) and
Action (great deeds and great works done publicly that create and evolve what it means to be human).

The distinction between Work and Labor is not simple, but can perhaps best be illustrated by the ability of computers to win at championship chess vs. their failings at the seemingly similar game "go" [http://en.wikipedia.org/wiki/Go_(game)]. Chess, although extremely complex and deep, is at bottom algorithmic, and therefore in a sense is a bizarre form of "Labor" (and also, obviously, as can be any work or labor, a social pastime and body/mind training). "go" at bottom is intensely aesthetic and intuitional, and therefore "Work". I am pushing all my young god-children and relatives to study "go" and look for vocations that embody some of its traits.

I doubt computers will soon become good novelists, gourmet chefs, counseling priests, or research scientists, let alone satisfactory basketball players, gigolos, or wet-nurses.

david fb

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419364 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 4/1/2013 11:06 AM
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http://www.arnoldkling.com/blog/

Paul Beaudry, David A. Green, and Benjamin M. Sand have a paper with an intriguing abstract, which says in part,

Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000. In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow. We go on to show that, in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.


If true, this would upset nearly everyone’s narrative apple cart, including mine.


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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 419365 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 4/1/2013 11:08 AM
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Computers to take over Primary care?

http://www.theatlantic.com/magazine/archive/2013/03/the-robo...


http://www.nytimes.com/2013/03/31/business/robots-and-humans...

FACTORY robots are usually caged off from humans on the assembly line lest the machines’ powerful steel arms deliver an accidental, bone-crunching right hook.

But now, gentler industrial robots, designed to work and play well with others, are coming out from behind their protective fences to work shoulder-to-shoulder with people. It’s an advance made possible by sophisticated algorithms and improvements in sensing technologies like computer vision.

“Researchers in labs worldwide are building robots that can predict what you’ll do next and be ready to give you the best possible assistance,” he said.

In a recent study, Dr. Shah and a student had human-robot teams perform a chore borrowed from the assembly line: the humans placed screws and the robots did the drilling. Then the teammates exchanged jobs and the robots observed the humans drill.

“The robot gathers information on how the person does the drilling,” adding that information to its algorithms, Dr. Shah said. “The robot isn’t learning one optimal way to drill. Instead it is learning a teammate’s preferences, and how to cooperate.”

Baxter, which costs $22,000, can lift objects from a conveyor belt. “You don’t have to tell it the exact velocity,” Dr. Brooks said. “It sees objects and grabs them, matching its speed to the speed of the object.”..


see such robots replacing alot of service workers. On the plus side you might be able to buy one & avoid a nursing home

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422325 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/7/2013 11:02 AM
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http://boston.cbslocal.com/2013/05/06/irobot-announces-roll-...

The RP VITA robot will be deployed allowing doctors and patients to interact with nothing more than an iPad and video screen. It’s the first such robot approved for use by the FDA.

Marcio Macedo, Director of Product Development for iRobot tells WBZ the system developed with InTouch Health of Santa Barbara, California, is based on a tablet interface that allows a doctor to be up and running virtually without training.

The cost to a hospital: between $4,000-$6,000 a month, including all the services needed to run the technology.


http://www.hasc.org/blog-entry/dr-watson-i-presume
In an article published last year, Vinod Khosla, co-founder of Sun Microsystems, questioned whether algorithms would replace doctors. The Silicon Valley entrepreneur would later predict that computers and robots will replace four out of five physicians in the United States.

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422796 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 9:56 AM
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http://www.motherjones.com/media/2013/05/robots-artificial-i...

Computer scientists have been predicting the imminent rise of machine intelligence since at least 1956, when the Dartmouth Summer Research Project on Artificial Intelligence gave the field its name, and there are only so many times you can cry wolf. Today, a full seven decades after the birth of the computer, all we have are iPhones, Microsoft Word, and in-dash navigation. You could be excused for thinking that computers that truly match the human brain are a ridiculous pipe dream.

Suppose it's 1940 and Lake Michigan has (somehow) been emptied. Your job is to fill it up using the following rule: To start off, you can add one fluid ounce of water to the lake bed. Eighteen months later, you can add two. In another 18 months, you can add four ounces. And so on. Obviously this is going to take a while.

By 1950, you have added around a gallon of water. But you keep soldiering on. By 1960, you have a bit more than 150 gallons. By 1970, you have 16,000 gallons, about as much as an average suburban swimming pool.

At this point it's been 30 years, and even though 16,000 gallons is a fair amount of water, it's nothing compared to the size of Lake Michigan. To the naked eye you've made no progress at all.

So let's skip all the way ahead to 2000. Still nothing. You have—maybe—a slight sheen on the lake floor. How about 2010? You have a few inches of water here and there. This is ridiculous. It's now been 70 years and you still don't have enough water to float a goldfish. Surely this task is futile?

But wait. Just as you're about to give up, things suddenly change. By 2020, you have about 40 feet of water. And by 2025 you're done.

in 1997, IBM's Deep Blue supercomputer beat world champion Garry Kasparov, and suddenly we decided that playing grandmaster-level chess didn't imply high intelligence after all.

So maybe translating human languages would be a fair test? Google Translate does a passable job of that these days. Recognizing human voices and responding appropriately? Siri mostly does that, and better systems are on the near horizon. Understanding the world well enough to win a round of Jeopardy! against human competition? A few years ago IBM's Watson supercomputer beat the two best human Jeopardy! champions of all time. Driving a car? Google has already logged more than 300,000 miles in its driverless cars, and in another decade they may be commercially available.

The truth is that all this represents more progress toward true AI than most of us realize.

When we think of human cognition, we usually think about things like composing music or writing a novel. But a big part of the human brain is dedicated to more prosaic functions, like taking in a chaotic visual field and recognizing the thousands of separate objects it contains. We do that so automatically we hardly even think of it as intelligence. But it is, and the fact that Google's car can do it at all is a real breakthrough.


Obviously there will be some jobs that only humans can or should do. But AI machine continually drip by drip invade the job market.

CEOs will ruthlessly utilize the above fact to improve the bottom line & thus stock options. But this puts a thought in my mind:"Why couldn't a CEO be replaced by an AI machine programmed to maximize stock returns & profits overseen by the board of directors?" Hee. That will NEVER happen. Current CEOs wouldn't fund such a development. It could be improvement on our capitalist system though. The number of failed CEOs fired with golden parachutes likely outnumber those that provide great stockholder value.

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Author: qazulight Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422797 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 10:25 AM
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When I read that I thought of the Motorcyclist that had problems with people following too close. Sometimes he would accidentally on purpose drop the 6 inch crescent wrench that he kept on his belt.

It is amazing what can happen in that situation.

Same with computers.

Cheers
Qazulight

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Author: OrmontUS Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422808 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 12:50 PM
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I bought IBM (sold yesterday at a decent profit - to replace some funds suddenly inserted into the Japanese market a little while ago) right after they demonstrated "Watson" on the Jeopardy quiz show. I figured it could displace outsourced Indian call center people.

Jeff

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422818 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 1:45 PM
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So maybe translating human languages would be a fair test? Google Translate does a passable job of that these days.

I predict that the occupation of translator is going to be one of the LAST jobs to be eliminated by artificial intelligence.
Machines will only be able to produce a reasonable translation if they are able to understand the content of the text.
That's not even on the horizon.

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422821 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 3:43 PM
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However, the point of the article is that more and more of the pie is earned by capital instead of labor; that is fine for the folks with capital, but it can't last forever; when very few people have jobs and therefore very few people have purchasing power, the return on capital will vanish as well.

So we have a choice between redistribution (high taxes on the rich and bread and circuses for everyone else) or a Star Trek economy where a certain portion of the capital is a birthright of citizens. In other words, you can tax money and give it away to people who need it, or you can "print" money and give it away to people who need it.

But I do wish someone would come up with something more clever, because mass unemployment is where we are heading.

The "if you have an extra coat, give it away" model would work, too, except people need a religious conversion to get that one going.

Everyone seems to be stuck in economic models that simply don't reflect reality. So please come up with a new theory, somebody.

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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422824 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 4:05 PM
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Thank you for recommending this post to our Best of feature.


Everyone seems to be stuck in economic models that simply don't reflect reality. So please come up with a new theory, somebody.




OK I tried to squeeze Steve to post this but he had the good sense to ignored me. }};-D

In truth it didn't end the way it sounded like it was going to but since it is a slow day... there you go.


**** Not signed ****


http://topdocumentaryfilms.com/breaking-inequality/

Breaking Inequality

2013 Economics 2 Comments

Breaking Inequality

Breaking Inequality is a documentary film about the corruption between Washington and Wall Street that has resulted in the largest inequality gap in the history of America.

It is a film that exposes the truth behind the single event that occurred back in the early 70's that set us off on this perilous journey that we are currently on.

The inequality gap is presently the worst that it has ever been and there is no solution in place to repair this crippling problem.

No country in the history of the world has ever remained a super power without a middle class and the road we are currently traveling doesn’t include this all-important segment of the population. The old saying “As goes the middle class… so goes the nation” holds true even more today than ever.

We live in a world where governments can create as much money as they want in order to fund all kinds of wasteful projects, wars, handouts, and banker bailouts. The current system by design has transferred the wealth from average everyday Americans to an elite few who care not about the majority.


Watch the full documentary now - 28 min


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Author: SuisseBear Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422827 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 5:12 PM
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corruption between Washington and Wall Street that has resulted in the largest inequality gap in the history of America.


That's very harsh Tim.

Citibank is saying this much nicer in their now infamous Plutonomy report, directed to their high-net-worth clients. You just got to hit the right tone between self-righteousness packaged between a slight appearance of irony:

With the exception of the boom in the Roaring 1920s, this super-rich group kept losing out its share of incomes in WWI, the Great Depression and WWII, and till the early eighties. Why? The answers are unclear, but the massive loss of capital income (dividend, rents, interest income, but not capital gains) from progressive corporate and estate taxation is a possible candidate. ... the resurgence in their fortunes since the mid-eighties was mainly from oversized salaries. The rich in the U.S. went from coupon-clipping, dividend-receiving rentiers to a Managerial Aristocracy indulged by their shareholders. ...

Society and governments need to be amenable to disproportionately allow/encourage the few to retain that fatter profit share. The Managerial Aristocracy, like in the Gilded Age, the Roaring Twenties, and the thriving nineties, needs to commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot.

We think that despite the post-bubble angst against celebrity CEOs, the trend of cost-cutting balance sheet-improving CEOs might just give way to risk-seeking CEOs, re-leveraging, going for growth and expecting disproportionate compensation for it.

It sounds quite unlikely, but that’s why we think it is quite possible. Meanwhile Private Equity and LBO funds are filling the risk-seeking and re-leveraging void, expecting and realizing disproportionate remuneration for their skills.


http://cryptome.org/0005/rich-pander.pdf

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422828 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 5:14 PM
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Government action did indeed make it easier for the rich to thrive, but I don't think that is the main problem. I think the main problem is that

1. People think that machines still create as many jobs as they destroy. They don't.
2. People think that most jobs are immune to automation. They aren't.
3. People think that money is some kind of commodity. It isn't. It is just an accounting system--a way of keeping score, if you will.
4. People have no idea what meaningful thing people will do instead of going to work everyday, and no one is working on that problem. They keep saying the problem is jobs, and wages; but that is SO yesterday.
5. No one has any idea what incentive corporations or people will have to produce goods that no one can buy, and they have no idea how people will buy goods whey they don't have money, which they can't get without jobs, which they won't have.
6. Everyone thinks some magic will come along and invent jobs for everyone. It won't. As soon as work comes along, someone will build a machine to do it faster and cheaper.

The problem is that we are still thinking about labor, money, and profit, and those things are going to disappear, for the most part.

So, we need a whole new system here. It must be a sustainable system that provides what we all need and gives us all something meaningful to do. Not everyone can be a novelist or artist or opera star.

Now, there are plenty of meaningful things that don't pay anything, so I consider that the easy part of the problem. But as a society we need a way to reward people for living good lives, and I don't think money has ever done a very good job of that. It used to do a pretty good job of getting people to things that they would rather have not done for free. But that sort of thing will be done by machines in the future, so money has outlived its function.

In short, the whole idea of money has to change. And it has to change soon.

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Author: steve203 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422834 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/14/2013 8:24 PM
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OK I tried to squeeze Steve to post this but he had the good sense to ignored me. }};-D

I figured my tongue in cheek post about opportunity in Detroit sturred up enough of a hornet's nest.

Besides, I mosied over to Dearborn to see this exhibit at the Henry Ford this afternoon.

Designing Tomorrow: America’s World’s Fairs of the 1930s helps explain why millions of Americans traveled to world’s fairs in the 1930s for a glimpse of the future.

http://www.thehenryford.org/events/worldsFairs.aspx

Too bad my Dad died years ago. He lived in NYC in the 30s and spent a lot of time at that fair. He would have enjoyed it.

Steve

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422867 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 11:02 AM
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more on the subject, from MIT
http://www.technologyreview.com/view/514861/its-time-to-talk...

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Author: Windchasers Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422884 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 1:41 PM
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Willi, you said:

However, the point of the article is that more and more of the pie is earned by capital instead of labor; that is fine for the folks with capital, but it can't last forever; when very few people have jobs and therefore very few people have purchasing power, the return on capital will vanish as well.

This is spot on, and underappreciated, in my opinion. But then you go on to say,

So we have a choice between redistribution... or a Star Trek economy

Which is where you lose me. After all, what will happen when ROIC vanishes? Well, obviously, investment will drop.
With too much automation, you cannibalize your customer base - since you just fired your customers, and now they can't buy your goods. But if they can't buy your goods, how are you going to make a profit? Answer: You're not. And with no profit, you're certainly not going to invest more money on factories or robots, when you're already producing more than anyone can buy.

In other words, automation is self-limiting. If you put your customers out of a job, they're going to run out of money, and they're not going to buy your products.

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Author: NozRydr Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422886 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 2:13 PM
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homeostasis happens

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Author: Windchasers Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422889 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 2:25 PM
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4. People have no idea what meaningful thing people will do instead of going to work everyday, and no one is working on that problem. They keep saying the problem is jobs, and wages; but that is SO yesterday.

...In short, the whole idea of money has to change. And it has to change soon.



Whoa, let's not call for the end of capitalism just yet. As long as there is scarcity, we'll need some way to distribute resources, and capitalism is the best system we've got so far. And I don't see scarcity ending any time soon, honestly. What happens if everyone wants to eat caviar every day? Or wants a luxury car? Or an annual trip to the moon? Or to live in a house made of gold?

Okay, fine, those are luxuries. Let's think more practically: When will humans ever stop trying to prevent death? We will always devote huge resources to that. So, until we cure cancer, heart disease, and even learn how to stop aging itself.. some professions are going to be more valuable than others. A heart surgeon or medical researcher will still be worth more than your average musician.


But I can still hear your arguments in my head: "Well, what happens when a robot becomes cheaper than a heart surgeon?" Well, what if? Let's unpack that idea.

First: it seems obvious that some jobs will undergo automation faster than others, right? We'll lose taxi drivers before we lose medical researchers, for example. So for this thought experiment, let's pick a profession - we'll say heart surgery - and we'll say that robotic advances are 1/2 as quick there as the average. I.e., costs drop 100% more quickly for your average good or service than for heart surgery.

So what happens when a robot surgeon comes on the scene, that's, say, 10% cheaper than a real surgeon?

Well, as we said earlier, other jobs are being automated 2x as fast as heart surgery. Which means prices of food, cars, houses, etc., are all dropping 2x as fast as the cost of a robotic surgeon. If the robot surgeon is 10% cheaper, your average good or service is going to be 20% cheaper.

Hmm. If I were the heart surgeon, I'd take a 15% pay cut. I'm now 5% cheaper than the robot, but I also still have a 5% pay boost in real terms. At the same time, the higher relative wages of surgeons is going to draw more people to the profession.

These numbers are made up, but the point is the same. Wherever there is scarcity, there will be room for capitalism. Capitalism is really just a system that directs where resources, including labor, should go. It funnels productive efforts towards those things we value more highly or find more scarce.

And there will be scarcity as long as humans can dream up greater, more difficult things to do. I've always wanted to see another solar system, myself. 

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422895 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 3:10 PM
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And with no profit, you're certainly not going to invest more money on factories or robots, when you're already producing more than anyone can buy...In other words, automation is self-limiting. If you put your customers out of a job, they're going to run out of money, and they're not going to buy your products.

Which is the point. Sooner or later, people who are only interested in profits will go out of business. They are not going to altruistically hire expensive human beings just to create customers, because they would lose money doing that. Therefore producers of ordinary goods will be people who are not interested in profits.

Now it may be that some producers will stay in business by only selling goods to the wealthy people who own the capital. But what about other people? The ones with no jobs and no money and no land for subsistence farming? How long are they going to put up with that situation?

Don't make me start talking about Rwanda.

We ought to be smarter and better than this.

The profit motive is going to be a disaster.

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422898 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 3:20 PM
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Hmm. If I were the heart surgeon, I'd take a 15% pay cut. I'm now 5% cheaper than the robot, but I also still have a 5% pay boost in real terms. At the same time, the higher relative wages of surgeons is going to draw more people to the profession.

Who is going to pay this slightly smaller but still exorbitant salary to the artisan heart surgeon when 80% of us are unemployed? For that matter, who is going to pay the capitalist who owns the robot surgeon?

I don't think you quite see the scope of the problem.

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Author: Windchasers Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422899 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 3:24 PM
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Which is the point. Sooner or later, people who are only interested in profits will go out of business. They are not going to altruistically hire expensive human beings just to create customers, because they would lose money doing that. Therefore producers of ordinary goods will be people who are not interested in profits.


I still really don't get your point.

Say I'm the guy who's researching AI and building robots. And the people who buy my robots are going out of business, because they're firing too many people, and thus eroding their own customer base.

So if my customer base is going out of business, then I'm also going to lose money. So, (duh), I'm going to stop working on AI or robots. Progress on automation will stop, or slow down, if you destroy your customer base.

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Author: Windchasers Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422900 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 3:34 PM
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Who is going to pay this slightly smaller but still exorbitant salary to the artisan heart surgeon when 80% of us are unemployed? For that matter, who is going to pay the capitalist who owns the robot surgeon?

I don't think you quite see the scope of the problem.



Hmm.. Well, say I'm a heart surgeon, and you're a gardener, and we're both unemployed.

Hey, I have an idea! As long as we've got all this free time, how about I do a checkup on your heart, if you mow my lawn and trim my flower garden? And maybe we can trade our services with our neighbor who used to be a baker, too, and he can bake us some bread. And we might as well bring in the baker's friend, an unemployed seamstress, to patch up our clothes.

...do you see where this is going?

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Author: WilliB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422907 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 4:02 PM
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So if my customer base is going out of business, then I'm also going to lose money. So, (duh), I'm going to stop working on AI or robots.

Or anything else that you can't sell, I'd assume. As I said, if your motive is profit, you'll stop producing.

Which is why, in post 422852, OrmontUS posts that the number one reason pushing people into stocks is

1) Nowhere else to make a buck


But when the only businesses left on their feet are the market and the bank, the market and the bank will fall, too.

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Author: Windchasers Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 422925 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 5/15/2013 5:17 PM
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So if my [robot-using] customer base is going out of business, then I'm also going to lose money. So, (duh), I'm going to stop working on AI or robots.

Or anything else that you can't sell, I'd assume. As I said, if your motive is profit, you'll stop producing.

Right. I'll not just stop producing robots, I'll stop putting money into improving them or advancing AI.

So doesn't it seem a bit nonsensical to say that profit motives are going to be responsible for both robots taking our jobs and at the same time, robot manufacturers halting robot production and research?

The two are contradictory. If the robot-producing factories have shut down, who's going to take my job?

~w

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 434960 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 9/28/2013 5:02 PM
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This from Mish's website is making me considering retitling this thread.

Meet Sedasys Your New Robot Anesthesiologist
http://globaleconomicanalysis.blogspot.com/2013/09/future-of...

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Author: tjscott0 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 436546 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 10/15/2013 12:23 PM
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http://www.arnoldkling.com/blog/wither-90-percent-of-employm...

Some analysts at the Gartner group are buying into Average is Over.

From 2020 to 2030, “you are going to see the first human-free enterprise — nobody is involved in it, it’s all software, communicating and negotiating with one another,” said Diane Morello, a Gartner analyst, who has looked at how smart machines will reshape employment.


The upshot?

On an extreme end of the scale, he [Gartner's Kenneth Brandt] put the impact of smart machines at 90% unemployment, which is either catastrophic or leads to a utopia, where basic needs are met and people are free from drudge work.

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Author: steve203 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 436549 of 449343
Subject: Re: Middle Class[Income] Jobs ain't Coming Back? Date: 10/15/2013 12:49 PM
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...it’s all software, communicating and negotiating with one another,”

I saw that movie!

http://www.criticalcommons.org/Members/ccManager/clips/colos...

And we know how that turned out.

Steve

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