Dropping Money from Helicopters

What?   MORE robots?

Yes, one final comment and then we’ll leave robots behind for now.

On May 2nd I posted my 3rd of 3 comments on the question, “Is this as good as it gets?”   Today – two days later – Bill Gross (now with Janus after leaving PIMCO)  released his May “Investment Outlook“, which, by the way, is worth a read in it entirety.   Here’s the URL:

https://www.janus.com/bill-gross-investment-outlook

(That’s where I got these robots, by the way.   I think they’re kinda cute!)

Ironically, Bill’s comments, in some ways, both mirror and compliment mine.  While I took the approach the macro-economic trend we’re both concerned about is both inevitable and GDP affecting, for an avowed capitalist, Bill made a very interesting argument:  It’s time to start dropping money from helicopters.  Why?

He comments, “I speak in this Outlook to information technology and the robotization of our future global economy.   Virtually every industry in existence is likely to become less labor-intensive in future years as new technology is assimilated into existing business models.”  I agree.  It’s inevitable.

Further, “Millions of jobs will be lost over the next 10-15 years. But medicine, manufacturing and even service intensive jobs are at risk. Investment managers too! Not only blue collar but now white collar professionals are being threatened by technological change.”  Agreed.

Check out this chart from page 2 of his update:

Bill’s claim?  He believes the graph proves, “Technology and robotization are changing the world for the better but those trends are not creating many quality jobs. Our new age economy – especially that of developed nations with aging demographics – is gradually putting more and more people out of work.”   Again, I agree.

The solution per Bill?   Ready?  Here you go:

“What should the policy response be?   …We should spend money where it’s needed most – our collapsing infrastructure for instance, health care for an aging generation and perhaps on a revolutionary new idea called UBI – Universal Basic Income. If more and more workers are going to be displaced by robots, then they will need money to live on, will they not? And if that strikes you as a form of socialism, I would suggest we get used to it.”

UBI, per Bill, would be an annual stipend paid to ‘every eligible citizen‘ – sort of a displacement fee paid to each of us because a robot took jobs away.

And while Bill suggests (‘tongue-in-cheek’) one way to distribute funds is drop them from helicopters – an idea actually promoted by other esteemed economists – that’s not what he really suggests.

What he really suggests is even more unbelievable – for a billionaire, died-in-the-wool capitalist.   Read his piece.  You’ll be amazed.

It reminds me of a joke:   “A capitalist sailor, with a parrot on his shoulder, walks into a bar in Cuba….”

• Terry Liebman