] After a decade of cost controls in the 1990s, insurance
] premiums have resumed their rapid growth - 11
] percent in 2001, 13 percent in 2002 and 14 percent in
] 2003, according to the Henry J. Kaiser Family Foundation.
]
] Ford spent $30 billion in 2002 to cover insurance costs
] for 560,000 workers, retirees, dependents and surviving
] spouses, said Ford spokeswoman Brenda Hines. In 2003, the
] figure jumped $2 billion, adding nearly $1,000 to the
] cost of every Ford vehicle produced in the United States.

The generation storm begins to brew...

] The information economy is likely to be a volatile,
] cyclical, unstable mess. The problem is not the "creative
] destruction" one would expect in an innovative economy,
] but the structural instability of an economy whose major
] products have very low marginal costs and hence prices,
] but are not low-cost to produce. The notion that an
] information-based economy will be inherently prosperous
] must be revised for a less optimistic scenario.

This connects with Jeremy's observation about the biotech industry having the same problems as the music industry. The work that matters is thought work. Our economy is not designed for thoughts. It is designed for things. Intellectual property is a compromise that allows thoughts to work like things. As more and more of our economy consists of thoughts and not things the compromise becomes more and more strained. Its going to pop. There is no alternative because we trained ourselves to ignore critical thinking about economic systems as a defense mechanism against the communists.

This is a black hole, and the only way to avoid getting sucked through it is to own a lot of real estate.

Eli Noam: Information Economies are inherently unstable

] The number of unemployed workers (currently 8.2 million)
] and the national unemployment rate of 5.6% in February
] 2004 do not adequately convey the true labor slack in the
] economy for several reasons. One major understatement is
] that the unemployment rate does not reflect the uniquely
] large 1.2% decline in labor force participation that has
] occurred since the current recession began in early 2001.
] This decline represents a stark contrast to the past
] three business cycles, when labor force participation
] actually grew by an average of 0.4% of the working-age
] population over similar lengths of time. Consequently,
] there is what can be called a "missing labor force" of
] 2,808,000 workers who might otherwise be in the actual
] labor force but have either dropped out entirely or
] failed to enter the labor market because of the lack of
] jobs. If the unemployment rate in February 2004 took into
] account this missing labor force, the unemployment rate
] would have been 7.4%, or 1.8% greater than the official
] rate of 5.6% (see chart below).

Here is someone publishing unemployment statistics which include the data about the contraction of the total labor force.

The unemployment statistics the government doesn't want you to see...

] Although in recent years the proportion of our labor
] force made up of those with at least some college has
] continued to grow, we appear, nonetheless, to be
] graduating too few skilled workers to address the
] apparent imbalance between the supply of such workers and
] the burgeoning demand for them. Perhaps the accelerated
] pace of high-tech equipment installations associated with
] the large increases in productivity growth in recent
] years is placing unachievable demands for skilled
] graduates over the short run. If the apparent
] acceleration in the demand for skilled workers to staff
] our high-tech capital stock is temporary as many presume,
] the pressure on our schools would ease as would the
] upward pressure on high-skilled wages.

In english: "We needed a lot of engineers to set up the new infrastructure over the past few years. Admins, Programmers, Network Engineers, etc... We're done doing that now. We don't need ya'll anymore. Thanks for all the productivity growth. I'm sure you can find a suitable job in another industry at a significant reduction in pay. You can rest assured that the overall economy has benefited greatly from your work. We're not planning to share the rewards with you, because you don't own it. We own it. We're looking for people who own stock to do really well in the coming years. We're exited about that, and we think you ought to be excited for us. Oh, and BTW, I'm cutting your pension. Have a nice day."

FRB: Speech, Greenspan--Critical role of education in the nation's economy--February 20, 2004

But don't panic.

Raise your little finger to your lips and repeat after me: "$44 Trillion Dollars"

Now follow this link, and click on the "endorsements" link, and look at the credentials of the people listed there. Recognize any names?

"It is the dawning of the age of aquarius, the age of aquarius... aquarius!!!"

The Coming Generational Storm

] Claire Buchan, a White House spokeswoman, said the
] administration has already looked into ways to compensate
] for future crunches on resources, pointing to a 2002
] White House appointed commission that advocated phasing
] out Social Security options for younger workers while
] allowing retired and near-retired persons to keep their
] benefits.

Social Security is a wealth redistribution system. Admit it. Thats what it is. When it started it was, on a demographic basis, taking money from the rich and giving it to the poor. The reason its going to fail is that, on a demographic basis, its now stealing money from the poor and giving it to the rich. We ought to accept that its a wealth redistribution system and run it like one. You ought to get it only if you need it, and it ought to suck just enough that most people won't want it. I'm all for raising the amount of money one can put in tax deferred personal savings accounts if we can do that without bankrupting the government. However, the path to fixing social security is to see it for what it is and run it appropriately. In order to do that the people making decisions about it are going to have to agree to cut their own potential income. For the most part, politics doesn't work that way. So if you're between the ages of 20 and 40, prepare to get fucked, because you are the smallest generational demographic, and thus you have the smallest amount of democratic political power. You will witness the very definition of tyranny of the majority in your lifetime.

Good news -- and bad -- for baby boomers, says AARP

] SAN FRANCISCO -- Tech job postings on two popular online
] employment sites have increased sharply, a sign that the
] long moribund job market may finally be turning around.
]
] Craigslist tech job postings in the San Francisco Bay
] Area have doubled from a year ago and are up 50 percent
] from six months ago, said CEO Jim Buckmaster. Activity
] has particularly picked up in the past four weeks, he
] said.

Wow...

Wired News: Not So Quiet on Tech Job Front

] Intel Corp. Chairman Andy Grove, a pioneer in the American
] high-tech industry, warned that the U.S. could lose the bulk of its
] information technology jobs to overseas competitors in the next
] decade, largely to India and China.

[IP] IT job exportation heats up.

] But today Galton's beautiful form might not be so
] regular. Although bell curve distribution is still
] considered normal, a surprising number of economic and
] social phenomena now seem to follow a different arc.
] Instead of being high in the center and low on the sides,
] this new distribution is low in the center and high on
] the sides. Call it the well curve.

Death of the middle class

] In the case of physical property, we take it for granted
] that the ownership right should have the potential of
] persisting as long as the physical object itself. In the
] case of an idea, however, we have chosen to strike a
] different balance in recognition of the chaos that could
] follow from having to trace back all the thoughts
] implicit in one's current undertaking and pay a royalty
] to the originator of each one. So rather than adopting
] that obviously principled but unworkable approach, we
] have chosen instead to follow the lead of British common
] law and place time limits on intellectual property
] rights.

I'm rerecommending this. I've read it now. Greenspan explains the changing nature of the situation just as I have in the past, and this talk offers itself as a good reference for such an explanation, as people usually don't want to take my word for it. :)

Intellectual Property is broken. You heard it here from the guy that runs the economy. So don't tell me I'm being silly.

Of course, Greenspans perspective on how to fix it is probably 180 degrees from mine.

FRB: Speech, Greenspan-Market economies--April 4, 2003