Saturday, August 12, 2017

The Rich Higgins memo: If ever you doubted that Trump loyalists inhabit a different universe, read this.

This is the memo from Rich Higgins the National Security Counsel staff member who was recently fired. No comment need be made. I suggest you read it through the end.


POTUS & POLITICAL WARFARE

by Rich Higgins

BACKGROUND. The Trump administration is suffering under withering information campaigns designed to first undermine, then delegitimize and ultimately remove the President. Possibly confusing these attacks with an elevated interplay of otherwise normal D.C. partisan infighting and adversarial media relations, the White House response to these campaigns reflects a political advocacy mindset that it is intensely reactive, severely under-inclusive and dangerously inadequate to the threat. If action is not taken to re-scope and respond to these hostile campaigns very soon, the administration risks implosion and subsequent early departure from the White House.

This is not politics as usual but rather political warfare at an unprecedented level that is openly engaged in the direct targeting of a seated president through manipulation of the news cycle. It must be recognized on its own terms so that immediate action can be taken. At its core, these campaigns run on multiple lines of effort, serve as the non-violent line of effort of a wider movement, and execute political warfare agendas that reflect cultural Marxist outcomes. The campaigns operate through narratives.

Because the hard left is aligned with Islamist organizations at local (ANTIFA working with Muslim Brotherhood doing business as MSA and CAIR), national (ACLU and BLM working with CAIR and MPAC) and international levels (OIC working with OSCE and the UN), recognition must given to the fact that they seamlessly interoperate at the narrative level as well. In candidate Trump, the opposition saw a threat to the “politically correct” enforcement narratives they’ve meticulously laid in over the past few decades. In President Trump, they see a latent threat to continue that effort to ruinous effect and their retaliatory response reflects this fear.

INTRODUCTION. Responding to relentless personal assaults on his character, candidate Trump identified the players and the strategy:

·       “The establishment and their media enablers will control over this nation through means that are very well known. Anyone who challenges their control is deemed a sexist, a racist, a xenophobe, and morally deformed.”President Trump, Oct 2016

Culturally conditioned to limit responses to such attacks as yet another round in the on-going drone from diversity and multicultural malcontents, these broadsides are discounted as political correctness run amuck. However, political correctness is a weapon against reason and critical thinking. This weapon functions as the enforcement mechanism of diversity narratives that seek to implement cultural Marxism. Candidate Trump’s rhetoric in the campaign not only cut through the Marxist narrative, he did so in ways that were viscerally comprehensible to a voting bloc that then made candidate Trump the president; making that bloc self-aware in the process. President Trump is either the candidate he ran as, or he is nothing.

Recognizing in candidate Trump an existential threat to cultural Marxist memes that dominate the prevailing cultural narrative, those that benefit recognize the threat he poses and seek his destruction. For this cabal, Trump must be destroyed. Far from politics as usual, this is a political warfare effort that seeks the destruction of a sitting president. Since Trump took office, the situation has intensified to crisis level proportions. For those engaged in the effort, especially those from within the “deep state” or permanent government apparatus, this raises clear Title 18 (legal) concerns.

DISCUSSION.

The Opposition. While opposition to President Trump manifests itself through political warfare memes centered on cultural Marxist narratives, this hardly means that opposition is limited to Marxists as conventionally understood. Having become the dominant cultural meme, some benefit from it while others are captured by it; including “deep state” actors, globalists, bankers, Islamists, and establishment Republicans. Through the campaign, candidate Trump tapped into a deep vein of concern among many citizens that America is at risk and is slipping away. Globalists and Islamists recognize that for their visions to succeed, America, both as an ideal and as a national and political identity, must be destroyed. Atomization of society must also occur at the individual level; with attacks directed against all levels of group and personal identity. Hence the sexism, racism and xenophobia memes. As a Judeo-Christian culture, forced inclusion of post-modern notions of tolerance is designed to induce nihilistic contradictions that reduce all thought, all faith, all loyalties to meaninglessness. Group rights based on sex or ethnicity are a direct assault on the very idea of individual human rights and natural law around which the Constitution was framed. “Transgender acceptance” memes attack at the most basic level by denying a person the right to declare the biological fact of one’s sex. When a population has 2 + 2 = 5 imposed on it, there are many that benefit:

·       Mainstream MediaThe principle mechanism for implementing narratives.
·       The AcademyAcademia has served as a principle counter-state node for some time and remains a key conduit for creating future adherents to cultural Marxist narratives and their derivative worldview.
·       The Deep StateThe successful outcome of cultural Marxism is a bureaucratic state beholden to no one, certainly not the American people. With no rule of law considerations outside those that further deep state power, the deep state truly becomes, as Hegel advocated, god bestriding the earth.
·       Global Corporatists & BankersExploitation of populations, unfettered by national protections and notions of personal morality and piety.
·       Democratic LeadershipThe democratic leadership has been a counter-state enabler that executes, sustains, and protects cultural Marxist programs of action and facilitates the relentless expansion of the deep state.
·       Republican LeadershipMore afraid of being accused of being called a racist, sexist, homophobe or Islamophobe than of failing to enforce their oaths to “support and defend the Constitution,” the Republican Establishment accepts and enforces cultural Marxist memes within its own sphere of operations. In doing so, knowingly or not, it becomes an agent of that. These “conservatives” become increasingly indistinguishable from their democratic counter-parts save that they misrepresent themselves to their constituents. Lacking the discernment to recognize their situation, they will work with globalists, corporatists, and the international financial interests and will likewise service the deep state. These establishment Republicans are the hard left’s designated defeat mechanism in the destruction of the old regime as well as the American ideal. Because candidate Trump publicly exposed them for their duplicitous activities, they are at risk as long as Trump can turn on them and are, therefore, bitter foes. Candidate Trump’s success remains an ongoing existential threat to establishment Republicans.
·       IslamistsIslamists ally with cultural Marxist because, as far back as the 1980s, they properly assessed that the hard left has a strong chance of reducing Western civilization to its benefit. Having co-opted post-modern narratives as critical points, Islamists deploy these narrative to strategically blind and then control US decision makers. This is by design and purposeful. “By their own hands!” has been the declared strategy of the Muslim Brotherhood since 1991. This strategy seeks to divide American society against itself with the forced imposition of Islamist objectives on one half of American society by the other half. Once a society has been effectively atomized, the population will have lost its faith in the old order, detest those who reduced it, and divide along the lines of narrative adherence. This is the intended outcome of hostile information cum political warfare campaigns and today we see their effects on American society.

Complicating the current situation, many close to the president have pushed him off his message when he was candidate Trump thus alienating him from his base thereby isolating him in the process. When President Trump is not candidate Trump, he becomes dangerously exposed. While the base that elected candidate Trump identified with his vision, they are only Trump’s insofar as he holds to the vision that made him president.

Political Warfare Attacks — A Primer. As used here, “political warfare” does not concern activities associated with the American political process but rather exclusively refers to political warfare as understood by the Maoist Insurgency model. Political warfare is one of the five components of a Maoist insurgency. Maoist methodologies employ synchronized violent and non-violent actions that focus on mobilization of individuals and groups to action. This approach envisions the direct use of non-violent operational arts and tactics as elements of combat power. In Maoist insurgencies, the formation of a counter-state is essential to seizing state power. Functioning as a hostile competing state acting within an existing state, it has an alternate infrastructure. Political warfare operates as one of the activities of the “counter-state” and is primarily focused on the resourcing and mobilization of the counter state or the exhaustion and demobilization of the targeted political movement. Political warfare methods can be implemented at strategic, operational, or tactical levels of operation.

Political warfare is warfare. Strategic information campaigns designed to delegitimize through disinformation arise out of non-violent lines of effort in political warfare regimes. They principally operate through narratives. Because the left is aligned with Islamist organizations at local, national and international levels, recognition should be given to the fact that they seamlessly interoperate through coordinated synchronized interactive narratives.

Cultural Marxism — A Primer. While the attacks on President Trump arise out of political warfare considerations based on non-kinetic lines of effort (as discussed below), they operate in a battle-space prepared, informed and conditioned by cultural Marxist drivers. In practical terms, the political warfare assault on President Trump cannot be separated from the cultural Marxist narratives that drive them. From an operational preparation of the environment perspective, President Trump is operating in a battle-space that reflects the left’s vision.
As used in this discussion, cultural Marxism relates to programs and activities that arise out of Gramsci Marxism, Fabian Socialism and most directly from the Frankfurt School. The Frankfurt strategy deconstructs societies through attacks on culture by imposing a dialectic that forces unresolvable contradictions under the rubric of critical theory. The result is induced nihilism, a belief in everything that is actually the belief in nothing.

That post-modern (diversity/multiculturalism) narratives seeks to implement cultural Marxist objectives can be demonstrated by reference to founding Frankfurt School theorist Herbert Marcuse’s repurposing of the term tolerance. In a 1965 paper, Marcuse defined tolerance as intolerance; said it can be implemented through undemocratic means to stop chauvinism (xenophobia), racism, discrimination; and should be extended to the left while denied to the right:

·       “The realization of the objective of tolerance would call for intolerance toward prevailing policies, attitudes, opinions, and the extension of tolerance to policies, attitudes, and opinions which are outlawed or suppressed.”
·       “Surely, no government can be expected to foster its own subversion, but in a democracy such a right is vested in the people (i.e. in the majority of the people). This means that the ways should not be blocked on which a subversive majority could develop, and if they are blocked by organized repression and indoctrination, their reopening may require apparently undemocratic means. They would include the withdrawal of toleration of speech and assembly from groups and movements which promote aggressive policies, armament, chauvinism, discrimination on the grounds of race and religion, or which oppose the extension of public services, social security, medical care, etc.” (8–9)
·       “Liberating tolerance, then, would mean intolerance against movements from the Right and toleration of movements from the Left. As to the scope of this tolerance and intolerance: … it would extend to the stage of action as well as of discussion and propaganda, of deed as well as of word.” (12)

It is through such post-modern constructs that interoperable narratives are established among various left-wing groups as well as between them and Islamist groups at all levels. For example, from the 2001 Conference of Foreign Ministers at Bamako, Mali, the Organization of Islamic Cooperation (OIC) declared its commitment to fight racism and xenophobia and then declared Islamophobia a “contemporary form of racism”:

·       In this context, the World Conference urges all states . . . take all necessary measures to combat hatred, discrimination, intolerance and acts of violence, intimidation and coercion motivated by racism, racial discrimination, xenophobia and related intolerance particularly against Islam
·       Racism, racial discrimination, xenophobia and related intolerance which display an increasing trend, in their most subtle and contemporary forms, constitute a violation of human rights. 3. Contemporary forms of racism are based on discrimination and disparagement on a cultural, rather than biological basis. In this content, the increasing trend of Islamophobia, as a distinct form of xenophobia in non-Muslim societies is very alarming.

That the OIC made these claims as part of its planned inputs to the United Nation’s “Third World Conference against Racism, Racial Discrimination, Xenophobia and Related Intolerance” further demonstrates the coordinated and interoperable nature of these narratives at international levels in international forums.

As cultural Marxist narratives intensify, they are to be further operationalized in the form of hate speech narratives. Hate speech narratives are non-random, coordinated, and fully interoperable escalations of cultural Marxist memes. Key international players include the European Union, the UN, and the OSCE, the OIC and the International Muslim Brotherhood. Hate speech memes are structured, coordinated, and implemented through these same international forums. They involve close coordination with media and social media and include the Countering Violent Extremism (CVE) narratives. David Shipler’s book Freedom of Speech provides a road map for how hate speech narratives are to be structured, deployed and enforced.

Battlespace. These attack narratives are pervasive, full spectrum and institutionalized at all levels. They operate in social media, television, the 24-hour news cycle in all media, and are entrenched at the upper levels of the bureaucracies and within the foreign policy establishment. They inform the entertainment industry from late night monologues, to situation comedies, to television series memes, to movie themes. The effort required to direct this capacity at President Trump is little more than a programming decision to do so. The cultural Marxist narrative is fully deployed, pervasive, full spectrum and ongoing. Regarding the president, attacks have become a relentless 24/7 effort.
While there is certainly a Marxist agenda and even Islamist motivations that must be seriously addressed in their own right, these motivations alone seem inadequate to explain the scope and magnitude of the effort directed against the president. The economic drivers behind the Marxist and Islamist ideologues are enormously influential and seek to leverage these ideological movements for their own self interests. While beyond the actual scope of this document, the benefactors of these political movements include; Urban Real Estate who depend greatly on immigrant tenants, International Banking who seeks to maintain US debtor status so as to control the application of American power, and elements of the business sector that depend upon immigrant labor or government infrastructure. The overall objective of these economic forces is the forced urbanization of the populace, thereby necessitating a larger, more powerful government. In summary, this is a form of population control by certain business cartels in league with cultural Marxists/corporatists/Islamists who will leverage Islamic terrorism threats to justify the creation of a police state.

Adversary Campaign Plan. Political Warfare has been described as “propaganda in battledress.” The effort directed at President Trump is executed along one overt, as well as two covert, lines of effort:

·       The overt line of effort is PUBLICITY. Publicity is the straightforward projection of a case that builds a picture in the audience’s mind designed to garner support. It is facts without context and information the adversary wants the audience to possess that creates an impression and sets conditions. It seeks to establish good will and receptiveness to additional inputs.
·       There are two covert lines of effort: PROPOGANDA [sic] and INFILTRATION/SUBVERSION.
·       Propaganda is the deliberate direction, even manipulation, of information to secure a definite outcome. It is an attempt to direct the thinking of the recipient, without his conscious collaboration, into predetermined channels that are established in the Publicity line of effort. It is the unwitting conditioning of the recipient by devious methods with an ulterior motive that seeks to move them incrementally over time into greater belief and acceptance of message transmitted in the Publicity line of effort.
·       Infiltration and subversion operate internal to the targeted organization in order to inform, target, coordinate, and amplify the effects of the publicity and propaganda. Both operate to gather intelligence, obstruct legitimate courses of action, provide inside information, and leak sensitive information that undermines the leadership and suppresses the morale of friendly elements.
·       Infiltration of political and social groups within a target state is done for the purpose of extending counter-state influence and control. The endgame is concealed and may involve illicit activities.
·       Subversion undermines or detaches the loyalties of significant political and social groups within the target state and transfers political and/or ideological loyalties to the counter-state. As the counter-state forms, a counter-elite of influential individual and key leaders within the target state will later facilitate the legitimacy and permanency of the new regime.

Political warfare employs both publicity and propaganda. It recognizes no intrinsic virtue in the news but rather envisions it as a mechanism to exploit and build up support. From a political warfare perspective, control of the news cycle is the most potent means of attracting and building up a favorable audience. As it relates to the news cycle, publicity and propaganda can be merged to form a “pseudo-publicity” that is presented as news in furtherance of sustaining pseudo-realities maintained by cultural Marxist memes. Pseudo-publicity treatment of President Trump dominates the news cycle. The current campaign against President Trump operates in the following manner:

The Meta Narrative. Meta narratives seeks to delegitimize President Trump, his administration, and the vision of America he projected as a candidate. With cultural Marxist memes serving as the backdrop, President Trump is to be relentlessly characterized as unfit through the use of supporting narratives acting to move unwitting populations to belief in the meta narrative. Hence:
·       “President Trump is illegitimate”
·       “President Trump is corrupt”
·       “President Trump is dishonest”

Note that the twitter accounts and mainstream media personalities pushing this narrative have seen their audience numbers rise greatly in the past 6 months. This is a direct result of the supporting and backdrop narratives channeling individuals to this meta-narrative.

Supporting Narratives. Meta-narratives are supported by an ongoing series supporting-narratives that can be swapped out as circumstances warrant. It is important to recognize that these stories do not have to be true, valid or accurate to serve their purpose. Over time, deserved or not, the cumulative effect of these supporting narratives will result in a Trump fatigue. From a political warfare perspective, President Trump’s inability to meet this challenge will cast him as a weak failed leader. The current list of supporting narratives include:
·       “Russia hacked the election”illegitimate
·       “Obstruction of Justice”corrupt
·       “Hiding Collusion”dishonest
·       “Putin Puppet”treasonous
Backdrop Narratives. The backdrop to the meta and supporting narratives are cultural Marxist memes designed to sustain a general sense of loathing of President Trump and the America that elected him. Hence:

·       “[meta] President Trump is illegitimate, [supporting] he was elected because of Russian hacking, [backdrop] and besides, he a racist, sexist xenophobe.”
Adversaries utilize these interlocking narratives as a defensive political and information warfare screen that silences critics and smears supporters of President Trump. When people in the media question the behavior, actions and decisions of the Trump Administration’s opponents, they are immediately said to be “working for the Russians” or “supporting Russian propaganda.” Individual Americans who support the President are deemed “deplorable” and “racist.”
End StateAttacks on President Trump are not just about destroying him, but also about destroying the vision of America that lead to his electionThose individuals and groups seeking the destruction of President Trump actually seek to suffocate the vision of America that made him president. Hence, the end state is not just a delegitimized, destabilized, immobilized and possibly destroyed presidency; but also demoralized movement composed of a large enough bloc to elect a president that subsequently become self-aware of its own disenfranchisement.

CONCLUSION.

The recent turn of events give rise to the observation that the defense of President Trump is the defense of America. In the same way President Lincoln was surrounded by political opposition both inside and outside of his wire, in both overt and covert forms, so too is President Trump. Had Lincoln failed, so too would have the Republic. The administration has been maneuvered into a constant back-pedal by relentless political warfare attacks structured to force him to assume a reactive posture that assures inadequate responses. The president can either drive or be driven by events; it’s time for him to drive them.

Sunday, August 6, 2017

The Democrats' Bind on Immigration

The Democrats are in a serious bind on immigration and they'd better become adept at learning how to lessen its grip.

Thomas B. Edsall, a professor of journalism at Columbia University and an op-ed contributor to The New York Times, specializes in telling truth to Democrats. (I was going to say "telling truth to power," but I couldn't think of any Democrat who has any power.) 

In a February 2017 op-ed piece, in The New York TimesThe Democrats’ Immigration Problem,  Mr. Edsall comprehensively demonstrates that Democrats are in a bind on immigration. 

In the July/August issue of The Atlantic, Peter Beinart, a liberal professor and writer, wrote much the same, in How the Democrats Lost Their Way on Immigration

Both should be required reading by Democratic candidates for the House and Senate, and their political backers, in 2018. But get ready: hordes of millennials won't like the message. 

While national polls show majority support for granting eventual legal status or citizenship to undocumented immigrants, there are at least three structural problems facing Democrats: first, there is less support for this position among African-Americans than among other Democrats; second, the immigration issue is less important for those who support the Democratic position than for those in opposition; and third, white voters are much less likely than non-whites to oppose those policies. 

Then there is another problem: when Democrats talk about "immigration," they're typically talking about the effects of deportation of illegal (or "undocumented") aliens on families, children, etc., or of "discrimination" in immigration policies on Hispanics, but when Republicans talk about "immigration," they're typically talking about violations of law, an increase in the numbers of non-whites in their communities, and jobs taken from Americans by "illegals." Since voters tend to be more easily roused by fear than by humaneness, the Republican approach is more potent, even if, in the long run, they are being unrealistic in making believe that illegal/undocumented immigrants are going to disappear. 

On its face, this analysis suggests that, in a general election, Democrats should not make "immigration" an important campaign issue unless the specific district in which they are running favors that approach. 

The problem in 2018 will be that Democrats seeking to run in swing districts will likely be facing a primary. For example, in the race for the seat made open by Ileana Ros-Lehtinen's retirement, FL-27, there are currently seven candidates, several of whom are likely to have enough money and name recognition to make a serious run. Whether a candidate can win that primary without emphasizing positions likely to incite turnout is problematic. 

The Republicans repeat their mantras--illegal immigration is just that--illegal--and nations must protect their borders. These slogans may seem noxious when they come from the mouths of Republican hypocrites who know damned well that real estate contractors and farmers and lawn care companies would suffer financially if they couldn't hire illegal immigrants, but the fact that Republicans have cynically exploited those slogans doesn't make them wrong

The Democratic establishment will say that they incorporate the need for border security into their "pitch" on immigration, but you have to look hard before you find that nugget. 

  • Take the 2016 Democratic Platform: it said not a word about the need for border security and carefully avoided the word "illegal." 
  • Or take the Democratic Congressional Campaign Committee's position: "Demand Comprehensive Immigration Reform! Donald Trump and his Republicans want to build a wall and deport millions of hardworking immigrants. Sign on to take a stand against their xenophobia now." 
  • Or take the Democratic National Committee's statement on immigration: "Democrats are fighting for every immigrant who feels threatened by Donald Trump’s election. We will not stand by and watch families be torn apart — Democrats in Congress and in states and cities across the country are already standing up to Trump’s hatred and bigotry to defend their immigrant neighbors." Yes, there's this pass at covering all fronts--"Democrats will continue to work toward comprehensive immigration reform that fixes our nation’s broken immigration system, improves border security, prioritizes enforcement so we are targeting criminals - not families, keeps families together, and strengthens our economy."--but who's kidding whom? 

In fact, some Democrats claim that unauthorized entry into the U.S. is not a crime. But it is: entry by an alien other than as authorized by an immigration agent is a crime punishable, in the case of a first-time offense, by up to six months imprisonment. 8 U.S.C. § 1325(a)(1).Yes, it's a misdemeanor, but why deny that it's a crime? 

Yes, immigration is a complicated, heart-rending issue. But failing to recognize the compelling power of inconvenient facts is self-defeating. If Democratic voters are not capable of understanding the need to throw Republican rhetoric back at them, then they deserve to remain in their powerless state.

Saturday, August 5, 2017

Trump Made them Believe He Felt Their Pain; Democrats Propose Governmental Solutions

An August 4, 2017 New York Times Op-Ed piece ("Why Trump Supporters Distrust Immigration and Diversity,"questions whether Trump supporters are racist, and states that “[Chuck] Schumer knows his party must quickly and candidly address the question of why the white working and middle classes — groups who were the foundation of Franklin Roosevelt’s New Deal coalition — often support Mr. Trump.” The Op-Ed also praises Schumer’s new "'Better Deal’ populist blueprint" because it “emphasiz[es] strategies that would help all American workers.”

The “Better Deal” is a list of conventional proposals that might chip away at some of the problems with the American economy, but its most prominent failing is that it gives no recognition whatsoever to the sense of profound hopelessness that is gripping average Americans and, for that matter, average citizens of the world. This hopelessness is what Trump recognized and pandered to. Until Democrats start recognizing that hopeless and its root causes, all the talk about infrastructure projects and hikes to the minimum wage will get them nowhere.

That hopelessness is primarily caused by the structural unemployment that is being hastened by the relentless pace of automation. A recent study by PwC, Will robots steal our jobs? The potential impact of automation on the UK and other major economieswhile focusing on the U.K., was portentous about the U.S.: in less than 15 years, up to 38% of U.S. jobs will be at high risk of loss through automation, with higher rates for transportation, storage, and wholesale and retail. Professors Acemoglu and Restrepo, in Robots and Jobs: Evidence from U.S. Labor Markets, found large job losses from robots alone and predicted “sizable” loss of jobs in the future. 

It is not enough for Democrats to criticize Trump for being insincere, uninformed, and cynical. People are not as stupid or undecipherable as so many of us liberals may think. Many who supported Trump knew damned well that the companies and the jobs that have been wiped out in their small towns and cities aren’t coming back, but at least someone had the brains to recognize their plight. The fact that Trump exploited their anger and gave them false hope does not eliminate the source of their fear: what are they and their children going to do to earn a living?

I can just hear the Democratic Party’s consultants telling their candidates not to start talking about shrinking job markets—too negative, too depressing, not optimistic! But why listen to the same operatives who have “advised” Democratic Congressional and Senate candidates right off the cliff? When was the last time you heard a Democrat say that the only issue that really counts is the need for a strong economy, based on good jobs, and that every other societal need depends on the strength of the economy? That’s not what the "Better Deal” is talking about—its focus, instead, is on government programs: "Our plan for A Better Deal starts by creating millions of good-paying, full-time jobs by directly investing in our crumbling infrastructure and prioritizing small business and entrepreneurs, instead of giving tax breaks to special interests. We will aggressively crack down on unfair foreign trade and fight back against corporations that outsource American jobs.  We will fight to ensure a living wage for all Americans and keep our promise to millions of workers who earned a pension, Social Security and Medicare, so seniors can retire with dignity.” That’s a big difference from talking about the need for a strong economy, period. 


In the August 4 Times, a letter writer remarks: "Ever since the election I’ve been scratching my head over why Donald Trump got elected.” Look around. Take a drive through neighborhoods in Pittsburgh and Youngstown and Orange County, New York, and the thousands of small towns in every state that have been hollowed out. That’s why Donald Trump got elected. He made people believe he felt their pain.

Thursday, May 25, 2017

The Big Issue

One of the biggest issue from now on is going to be how people will be able to earn a living in a world increasingly dominated by computers. But you would not know it from listening to politicians, especially Democrats, who claim to speak for the little guy.

Even though computers and the uses to which they are put--such as Artificial Intelligence (AI) and robots--will not likely displace all jobs, the number of jobs they will eliminate could very well plunge the whole world into a state of economic uncertainty, if not outright permanent depression.

Am I overstating the risk? Isn't it true that ever since the Industrial Revolution, jobs displaced by changing technology have been replaced by even more jobs in other lines of work? Won't retraining for jobs alongside the computer "maintain the equilibrium," i.e., create as many or more jobs than are replaced?

Not necessarily, or even likely. 

A recent report by Professors Daron Acemoglu and Pascual Restrepo, Robots and Jobs: Evidence from U.S. Labor Markets, published by the National Bureau of Economic Research, analyzes the effect of the increase in industrial robot usage between 1990 and 2007 on US local labor markets. Note that this is not a study of the overall effect of automation and computerization on jobs; it is just the effect of robots, which the report defines as 
fully autonomous machines that do not need a human operator and that can be programmed to perform several manual tasks such as welding, painting, assembling, handling materials, or packaging. Textile looms, elevators, cranes, transportation bands or coffee makers are not industrial robots as they have a unique purpose, cannot be reprogrammed to perform other tasks, and/or require a human operator.
The authors note that their report is only "a first step in a comprehensive evaluation of how robots will affect, and are already affecting, the labor market equilibrium, . . . because our methodology directly estimates only the effect of robots on employment in a commuting zone relative to other commuting zones that have become less exposed to robots." But the authors offer a convincing basis for believing that this is a necessary first step and has validity. 

The bottom line? Sizable net loss of jobs and more in the future:
Because there are relatively few robots in the US economy, the number of jobs lost due to robots has been limited so far (ranging between 360,000 and 670,000 jobs, equivalent to a 0.18-0.34 percentage point decline in the employment to population ratio). However, if the spread of robots proceeds as expected by experts over the next two decades (e.g., Brynjolfsson and McAfee, 2012, especially pp. 27-32, and Ford, 2016), the future aggregate implications of the spread of robots could be much more sizable.
A recent UK-oriented report by PriceWaterhouseCoopers, Will robots steal our jobs? The potential impact of automation on the UK and other major economies, attempts a more ambitious task: measuring the effects on employment in major Western economies, principally that of the UK. The methodology is to analyze the effect of automation on specific tasks within jobs. These are the "Key Points":


• Our analysis suggests that up to 30% of UK jobs could potentially be at high risk of automation by the early 2030s, lower than the US (38%) or Germany (35%), but higher than Japan (21%). 
• The risks appear highest in sectors such as transportation and storage (56%), manufacturing (46%) and wholesale and retail (44%), but lower in sectors like health and social work (17%). 
• For individual workers, the key differentiating factor is education. For those with just GCSE-level education or lower, the estimated potential risk of automation is as high as 46% in the UK, but this falls to only around 12% for those with undergraduate degrees or higher. 
• However, in practice, not all of these jobs may actually be automated for a variety of economic, legal and regulatory reasons. 
• Furthermore new automation technologies in areas like AI and robotics will both create some totally new jobs in the digital technology area and, through productivity gains, generate additional wealth and spending that will support additional jobs of existing kinds, primarily in services sectors that are less easy to automate. 
• The net impact of automation on total employment is therefore unclear. Average pre-tax incomes should rise due to the productivity gains, but these benefits may not be evenly spread across income groups. 
• There is therefore a case for some form of government intervention to ensure that the potential gains from automation are shared more widely across society through policies like increased investment in vocational education and training. Universal basic income schemes may also be considered, though these suffer from potential problems in terms of affordability and adverse effects on the incentives to work and generate wealth.
These are just two of many reports and studies in the recent past. More research needs to be done, but it is extremely dangerous to fall back on the nostrum that all will be well because people will be retrained. The chances are substantial that, instead, we will end up with more and more income and wealth going to the most highly educated (which usually correlates with the accident of people's birth) and the great mass fighting among themselves for reduced income from fewer jobs.


The question is, do politicians start talking about this or do they wait for the effects to be solidified? 

From my experience in past Democratic Congressional campaigns, the consultants will solemnly state that candidates can't talk about issues this complicated. So, stick to yelling "Hands Off My Medicare!" while ignoring the long-term threat to Medicare and Social Security solvency. 

Donald Trump taught us one thing: politicians who talk--even (or especially, I fear) dishonestly or ignorantly--about issues that people see and feel for themselves can attract voters. By contrast, when Hillary Clinton was asked at the debates what economic policies she advocated, she immediately started talking about infrastructure spending--a necessary program but not focused on the long-term problems of the process of hollowing out in small towns and cities throughout the U.S. In other words, uninspiring and tone deaf to people's feelings.

The conclusion from the PwC report about the need for a societal response is a warning to politicians that sitting idly by and waiting for automation to wreck people's lives is bad policy and bad politics. 

I am waiting for Democratic candidates and think tanks to start talking about this issue openly and vigorously. It is a hell of a lot better way of demonstrating to people that "we care" and "we hear you" and "we feel your pain" than (a) emitting these hackneyed phrases or (b) talking only about infrastructure programs. 

Being a realist, I expect to have a long and lonely wait.


Tuesday, February 21, 2017

The Piwowar Kerfuffle

Bloomberg reports that the acting Chair of the (at present, 2-member) SEC, Michael S. Piwowar, has requested an examination of delegated authority to the Staff. Delegated authority is authority nominally vested with the 5-member Commission that the Commission delegates to specific staff members.


The SEC has the statutory authority to conduct investigations of possible violations of the federal securities laws or rules, by issuance of subpoenas for documents and testimony. That authority, under the law, can be exercised by "any member of the Commission or any officer designated by it." 


The staff (since 1972 in the centralized Division of Enforcement ) has long since been delegated the authority to conduct investigations, and to suggest otherwise would be scandalous. The issue is whether the Commission should decide what to investigate with subpoena power.


Under 17 CFR § 202.5(a), formal orders of investigation are issued on a case-by-case basis to authorize the issuance of subpoenas. Until 2009, formal orders were issued by the Commission. The Staff would have to submit a memorandum recommending the issuance of the formal order and detailing the evidence, and perhaps the legal theory, justifying the necessary conclusion that it is possible that the securities laws have been or about to be violated. Formal orders were usually obtained within 3 weeks. Rarely, if ever, was the request turned down. Emergency situations requiring immediate action resulted in approval on a "walk-around" (the Commissioners' offices) "seriatim" consideration. I was involved in SEC investigations, on its Enforcement Staff, from 1973 to 1981, and never found the extra effort required to obtain Commission approval of a formal order to be a deterrence to effective enforcement. It added an extra set of eyes to review this very formidable exercise of power--not, generally, a bad thing at all.


In 2009, the Commission was in the midst of the great financial crisis and, not coincidentally, the well-deserved scandal resulting from the abject failure of the Commission Staff to recognize the Madoff fraud. Undoubtedly looking for a way to divert attention from the Madoff (and Sanford) frauds and to make it appear the Commission was "tough," the Commission issued an order delegating, for a one-year trial period, to the Director of Enforcement the authority to approve formal orders of investigation. A year later, the delegation was made permanent. The SEC said that the purpose of this delegation  to "expedite the investigative process by reducing the time and paperwork previously associated with obtaining Commission authorization prior to issuing subpoenas." Perhaps. Meanwhile, the Director "sub-delegated" the power to issue formal orders to a host of senior staff within the Division.


In my opinion, as a former supervisor in the Enforcement Division (1973-1981), Acting Chairman Piwowar is doing no harm by inquiring into the issue of delegation, and there would be nothing wrong, assuming the good faith (and willingness to enforce the laws vigorously) of the Commissioners, with bringing back issuance of formal orders to the Commission. 

A bigger and more important, if less sexy, question is whether the Acting Chairman wants to get to the bottom of what has been a chronic problem, at least in years past, with Enforcement: getting the facts right. Staff recommendations to sue someone have to be approved by the Commission itself. These recommendations are contained in a staff "action memorandum," which describe the factual and legal basis for bringing a particular case against a particular individual or entity. 


The Commission frequently gets the facts wrong in its suits. Why? Because the factual assertions in action memoranda--the content of documents and witness statements--are not always carefully reviewed by supervisors before these action memoranda are sent to the Commission. I required my staff--including the later Director of the Division of Enforcement, Bill McLucas--to annotate their draft action memoranda to the evidence, and I checked the evidence. I do not believe that this is the uniform practice even today, in the age of electronic documentation. It positively should be required, and, if that change were effected, whoever got that done would deserve hearty praise.


Getting the facts wrong is bad for the Commission and bad for the individual or entity that may be falsely accused. Getting it right is the moral thing to do.


Unfortunately, when I left a message with Acting Chairman Piwowar's office seeking to speak with his office and pass on this observation, I got a call back not from his staff but from the Commission's Public Affairs office (apparently because I had said on the phone message that I authored a blog). The flack, smarmily, said "no comment." 


Too bad for Acting Chairman Piwowar. He was on the right track.