On Automated Future, Treasury Secretary is "Out of Touch"

The conversation needs to switch from 'when' to 'what now' soon. Very soon.

Getty Images / Mark Wilson

Last week, President Donald Trump’s New Treasury Secretary, Steven Mnuchin, said he’s “not worried at all” about automation, stirring up a lot of controversy. Then, on Tuesday, in an interview on CNBC, Democratic Powerbroker and entrepreneur, also neighbor to Trump at Mar-a-Lago in Florida, Jeff Greene explained his world views, saying that Mnuchin is “completely out of touch with reality.”

“I think he’s sort of missing it on the business thing,” Greene said. “I mean, 88 percent of manufacturing jobs were lost because of technology. So, to build a wall and keep Mexicans or Latin Americans out of the country, to clamp down on immigration, to think that globalization is the apparent problem is a mistake.”

He continued to say that neither of the parties are focusing on new forms of technology, which he called “the big issue of our time.”

“I really believe that what globalization did to the manufacturing blue collar jobs over 30 or 40 years, big data, A.I., robotics, machine learning is going to do the white-collar work for us in the next five to 10 years,” Greene said. “I think we are heading into a period of unprecedented job destruction.”

Mnuchin last week said those sorts of changes are not on his radar and are 50 to 100 years away, a prediction Greene characterized as “ridiculous.”

“He’s completely out of touch with reality,” Greene said. “I mean look, come on, you’ve seen the Amazon store, no employees. Why wouldn’t every store be that way?”

It seems automation is coming much quicker than even Greene expects. On Monday, the Wall Street Journal reported that Black Rock, Inc. would start to use algorithms instead of stock pickers.

For the first time BlackRock’s Main Street customers will be able to buy lower-cost quantitative stock funds that rely on data and computer systems to make predictions, an investment option previously available only to large institutional investors. Some existing funds will merge, get new investment mandates or close.

So what’s the upside of automation? Greene says it’ll be more free time.

“We will have more free time. There are many families where they are working 100, 120 hours a week just to get by. The main thing technology has done now is benefited businesses because they have a lot of savings by reducing costs of their employees. But, I think if we can get technology to be helpful in reducing the cost of living for people who are struggling. For instance, 3D printing houses, so we get housing costs way, way down, people would have lower mortgage payments. More renewable energy, so we have lower energy payments. If I had to think about how I see society evolve, I really don’t believe that the work consumption model of our capitalist economy is going to work long term and we’re going to have to focus on quality of life, which is what millennials are talking about now.”

Mnuchin said in an interview with Axios that automation is “not even on our radar screen” and that it could be “50 to 100 more years [away]” before we have to worry about it. Mnuchin is probably just channeling the millions of Americans who are in denial.

A recent study released this month by the National Bureau of Economic Research finds that for every robot added to a work zone of a thousand people, employment was reduced by about 5.6 workers in that zone. It also found that between 1990 and 2007 as many as 670,000 jobs were lost to automation, and that is considered “limited so far.”

Another study from 2013 by the University of Oxford calculated that a staggering 47 percent of U.S. employment is at risk of automation, which rounds out to about 65 million careers that could be replaced by machines by 2030.

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