Rebane's Ruminations
November 2026
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  • George Rebane

    The American workforce is in crisis, and no one wants to talk about the real nature of that crisis.  Perhaps the established news outlets and commentators consider the issue too hot to handle; then again, maybe very few see the problem.  Today, this is often where the itinerant blogger enters unannounced, and shouts his vision to an audience uncertain, and most likely unbelieving.

    PeopleMass

    The un-debated national problem is that a large and growing fraction of our adults of working age can no longer sell their labor at wages that will support their current lifestyle.  Today’s recession may be seen as a blessing that hides this reality for another year or two.  We are assured by the media and government pundits that all the jobs and more will return when the recession is over, but they most certainly will not return through the same companies that are now using the financial crisis to permanently pare back the unproductive labor component of their businesses.  In this series of posts I will attempt to make the case for the dimension, causes, and direction of this national crisis as I believe it will unfold.

    Let’s start the whole thing off with the bottom line.  Automation fueled by radical advances in cheap machine intelligence, robotics, and globalization (that makes available equally or better trained workers) is relegating the overpriced American worker to the hinterlands of human capital.  The short form is that the natural dispersion of human intelligence (recall that half the people have two-digit IQs) combined with a catastrophic educational system has produced an exploding population of under-qualified workers, the larger fraction of whom are simply untrainable to compete in the global job markets of which the United States is now but a part.  And that same educational system continues undeterred on its well-worn path.

    (more…)

  • George Rebane

    CaptPhillips With the heroic Captain Richard Phillips in a lifeboat full of armed pirates surrounded by US Navy warships with no orders on how to proceed, we see the media interviewing retired generals on what to do.  One of these guys – he must have gotten his star by passing a multiple choice test – sagely advised the anchor that we should let the people there on site (i.e. monitoring the lifeboat) make the decisions and not second-guess them.  That is exactly NOT what we should do.

    This is a geo-strategic matter involving so many more dimensions than any destroyer captain has purview over or is trained to handle.  What is needed is a clear statement of purpose and mission objective given to the naval personnel on the scene.  Since this involves a multi-national situation and its solution has a long shadow into the future, the White House should be visibly involved.  We as Americans don’t need to know the details of the national solution to this situation, but we and the world need to know that our President has given the Navy orders on how to proceed as this situation continues to develop.  Looking like he’s absent from yet another vote is not the way to take the high ground on this.  And the high ground must be taken.

    [12apr2009 update]  Redemption!  Captain Phillips was freed unharmed by the US Navy “after a brief firefight in which three of the four pirates were killed.”  This will happen again, and our government needs to quickly tell the world that our forces are competent, are present, and have received orders on how to deal with the situation as it develops.  We don’t need to display ‘tangled in our own underwear’ pieces like this one in yesterday’s Washington Post.  Happy Easter! 

  • George Rebane

    As investment guru Porter Stansberrry (Stansberry & Associates) reviews the Obama onslaught with historical levels of printing money, raising taxes, and legislating new productivity killing laws into place, he summarizes with –

    … these fears ought to apply equally to Democrats or Republicans. If you were trying to devise a political plan to destroy the country, this is the route you’d take: make it harder than ever before to produce anything, devalue the currency, and raise taxes by 50%.

     

    MMrateResets

    And for those who are betting on the recent “glimmer” in Obama’s eye, financial academic and blogger Adam Levitin of Credit Slips reminds us of the mortgage reset tsunami still heading for us.

    … it’s worth remembering that only 14% of mortgages outstanding are subprime. Most mortgages aren’t subprime. To be sure, a disaster in 14% of the market is a huge problem in and of itself. But this graph from Credit Suisse is the most sobering thing I’ve seen in a while. It shows that most of the interest rate resets ahead aren’t subprime, but are instead Alt-A and option-ARMs. Alt-A is the category of loans made to consumers with FICO scores just above the subprime threshold. Option ARMs give borrowers several payment options, including making a minimum payment that does not even cover the interest that accrued in the last month. This means it’s pretty easy for an option ARM to end up underwater, even in a market where prices are holding steady. If real estate prices are dropping, it is even more likely that an option ARM will end up upside down, which makes refinancing near impossible. The bulk of the Alt-A and option-ARM resets are coming in 2010-2011. A lot of things could change before then. But we might just be seeing the tip of the iceberg in the housing market.

    And from the graph you can see that here in 2009 we are in the relatively calm eye of the storm.

     

  • George Rebane

    Thought this might be worth a post for the locals, and all others taking I-80 over the Sierras.  Nevada County announced that “starting 4/10 Caltrans will be piloting all truckers during detour:

    I80detour Senior Civil Engineer, Steve Castleberry forwarded your concerns about the I-80 detour and got a call back from Caltrans yesterday regarding the I-80 detours. They wanted to report a couple of changes they are making in their detouring of trucks onto Highway 20. First, starting today, they will be piloting all the trucks on Highway 20 to insure slow speeds are maintained. This, coupled with the truck holding described in the attached flyer, is intended to encourage trucks to schedule their trips during non detour hours. The second activity they reported is Caltrans additional maintenance activity near Bear River to clear trees that are keeping the road in shadow and therefore icy during the day.

    They are planning to include these activities in their presentation to the Board next Tuesday. I am not sure this is an indication that everything will be all right from here on out. However, they responded unusually quickly to Steve’s e-mail so I think they are at least aware of our concerns. For questions, contact Steve Castleberry – Public Works at 530-265-1718.”

  • George Rebane

    Our government’s reaction to Somali pirates and the Saudi king says it all – by our own hand we are a changed and diminished nation.

    Upsidedown In days of yore our government would have acted fast and with finality against pirates – especially those in shirtsleeves and small open boats on the high seas.  Merchantmen were all armed and could repel such ragtag boarders, and our navy laid waste to ‘safe havens’ that harbored the scum.  Now in this age of sensitivity, we don’t even want to arrest the sumbiches because we don’t know to what jurisdiction to take them for a fair trial.  How about a fair trial right there in the water with the sharks (the swimming kind, not the litigation kind)?  Thus arrives the Mad Max world when civilization refuses to defend itself.

    And let’s cut the crap on Obama and the Saudi king.  Bowing is an act of obeisance, usually offered during arrival and parting, that involves the bower lowering his head and eyes in front of the bowee (new word, feel free to use it).  And most certainly it’s a bow when your head goes lower than the other guy’s head (see around 50-55 seconds into the video).  Now Obama feels that the changed US must do more than a little bowing to our creditors, benefactors, and campaign contributors, especially since he and his crowd don’t have a clue on how to pull us out of this recession, but need to keep selling bogus bonds to the Arabs and Chinese.  We do what we must.

    Meanwhile back at the ranch, one now has to conclude that Sec Treasury Geithner is either evil or butt stupid – for the moment let’s give him the benefit of doubt and consider him just a butt stupid tax dodger.  The man has identified the nation’s venture capital firms as being like hedge funds, and a new source of ‘systemic risk’ to our financial structure.  Our VC firms are one of the brightest jewels in the country’s entrepreneurial crown.  Their record in financing start-up innovators that have grown to world giants – Intel, Apple, Cisco, Google, Amazon, … – and kept us in the forefront of technology and commerce is bright and blazing.  Their financial dealings are miniscule while the risk in their investments is transparent and well understood by the investors.  Nevertheless, the pace of government running amok quickens.  James Freeman in today’s WSJ describes this piece of bizarre news from Washington.

    Administrivia – Mr. Gary Zimmerman, Senior Economist at the San Francisco Federal Reserve Bank, sent me the PowerPoint he presented at the recent Nevada County Economic Development meeting.  It is available from the post on the meeting here. 

  • George Rebane

    The French socialists and communists are really tuning up their anti-capitalist protesting methods.  You see, the market demand for getting properly trained in the skills of laying down in the streets, assaulting police lines, etc is getting so high that a new start-up will now teach you these skills over a weekend course that will cost $67.  Mr. Xavier Renou, the entrepreneur, has started this business to do his conscientious part to protest encroaching capitalism in France.  … how’s that again?

    Now that President Obama has finished his trip abroad with a swing through the mid-east, we see that he can reel off the litany of US accomplishments to the Iraqi people as well as any Republican from the last administration.  Of course, he isn’t about to credit Bush with any of this.  From a careful perusal of his remarks to our troops, it is clear that they, on their own recognizance, decided to invade the country and do the dirty work of setting things right – and for that they were commended.  And since the surge worked so well in Iraq, Obama and Gates are going to apply it in Afghanistan with similar hopes.  Well, we can’t exactly call it a surge, now can we?  That’s why in Democratic circles it will henceforth be known as a “tactical demographic enhancement” – only from Washington DC.

    UShealthcare The early harbingers of national healthcare are popping up here and there.  In today’s WSJ Drs. Groopman and Hartzband of the Harvard Medical School write that government imposed ‘quality’ care is dangerous (here).  It seems that if the socialist bureaucrats have their way, the government will establish the standards of care which must be uniformly applied across the land.  The only problem is that the tested application of such standards has never resulted in lowered mortality rates, but has proven to increase your chance of dying under this new form of the state’s embrace.

    Idiot’s Corner.  And finally in the same healthcare vein, one of our local worthies – calling him a socialist would be an insult to the rest of them – writes in our local newspaper The Union that ‘Government needs to put America on a diet’.  To wit (or lack thereof)

    Nevertheless, genetic factors, overeating, with a sedentary lifestyle play a significant role in causing obesity. But, the government should be playing the lead in reducing America’s extra-large sizes. Government needs to get people to eat less and exercise more. Where did government go to, that it abdicated its authority to promote healthy lifestyles?

    “… abdicated its authority to promote healthy lifestyles?” my, my, my!  And the woods hereabouts are full of them.

  • George Rebane

    TT09cover Most of our neighbors continue to believe that liberty and equality can always increase in tandem.  Unfortunately, as our Founders and these posts have pointed out, liberty fosters inequality as the natural order of life – attempting to raise one always lowers the other.  Even as we all line up equally on the starting line, those who are most free to use their individual skills and natural capabilities will quickly pull ahead of those who lack the skills and capabilities.  Equal opportunity has never guaranteed equal outcome.

    These thoughts arise again in the wake of TechTest2009 which was given last Saturday (4 April) at Nevada Union High School to a small cadre of seniors from all the county’s high schools.  The interested reader can download the nine question test here to see what these young people had to deal with during the four-hour merit scholarship exam.  Only their test scores will determine how this year’s $15,000 of scholarships will be awarded.  The checks will be handed out in the upcoming countywide scholarship awards convocation that is held every May.

    The young students who took TT09 are all headed for technical careers, an extremely discriminating line of work which has not been properly recognized nor rewarded by the people we have elected to govern us during most of the last forty years.  Today this bias against people who can create wealth that benefits all is at its historic height, and the future of our technology lead is rapidly eroding as skilled youngsters all over the world enter the field to compete with the United States.

    Two years ago I wrote a short piece on income inequality and education that is even more relevant today than it was then, and, given our current course, promises to be more so tomorrow.  (Download ‘Income Inequality and Education‘)

  • George Rebane

    TeaPartyFlyer   Download Rally flyer 6 (Final general flyer) for a more readable version.  [7apr09 update] Kim Pruett emailed that “If you still want to ride the Patriot Express buses contact Patti at the Parsonage B&B at 265-9478 to reserve your seat.  There are only a few left!”

  • George Rebane

    There has been another significant advance in machine intelligence.  Two projects have demonstrated that machines will now start doing independent research that can lead to new discoveries.  Adam, an artificial critter, did an experiment in yeast genetics to prove a longstanding hypothesis, ‘he’ did it with very minimal human intervention.

    Adam has cost roughly $1 million to develop and the software that drives Adam's thought process sits on three computers, allowing Adam to investigate a thousand experiments a day and still keep track of all the results better than humans can. (The development) group has also created another robot scientist called Eve dedicated to screening chemical compounds for new pharmaceutical drugs that could combat diseases such as malaria.

    Another step forward in this field is another system that was allowed to ‘look’ at a physical system (a compound pendulum), ‘play’ with it, and then deduce the physical laws that made the pendulum do what it does.

    More here and here and here

    These advances again demonstrate the ongoing acceleration of technology that Singularity Signposts highlights.  The part of such advances that is rarely discussed is their socio-economic impact.  Adam now is capable of displacing a number of very talented scientists and laboratory technicians.  In short, robots have already impacted humans doing lower level jobs, but now they are starting to do the jobs of highly trained workers.  Contrary to some loud denials from politically motivated investigators, this will have devastating effects on the future employability of workers who will seek to compete with machines and still draw wages that maintain a quality of life to which people (at least Americans) have become accustomed.  There will be more to say on this in a later post. 

    I want to thank the several RR readers – not all of whom believe in the portents I have here outlined – who sent me links to various announcements of these very significant events.  And I apologize for the delay in posting this since I have had some corrupted cookie problems in logging in to TypePad.

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