Dave Gonigam – June 7, 2012
- Is technological progress decelerating? Or… what good is a smartphone and an iPad while we still wait for a flying car?
- Progress in computers and nothing else? Jeffrey Tucker and Patrick Cox tag-team wrestle with the “deceleration” thesis. (Warning: Patrick attempts a body slam)
- Gold sinks back below $1,600… Addison with a timely reminder about the right reasons to own it
- Bernanke bloviates… Large dogs subject to “new taxes and weird fees”… an Xer and a member of the GI generation weigh in on Social Security… and more!
“We wanted flying cars, instead we got 140 characters.”
So reads the subtitle of a report from Founders Fund, a venture capital firm co-founded by Peter Thiel — the man who launched PayPal.
We missed it when it came out. We were busy at last year’s Agora Financial Investment Symposium. But we see Thiel’s opinion hasn’t changed.
His thesis? Computers are getting faster, cheaper, better. But in the realm of “real stuff,” human progress is nearing a standstill.
“Whether we look at transportation, energy, commodity production, food production, agro-tech, nanotechnology — that with the exception of computers, we’ve had tremendous slowdown,” he told an audience at Stanford University last month.
“I believe we are in a world where innovation in stuff was outlawed,” he went on. “It was basically outlawed in the last 40 years — part of it was environmentalism, part of it was risk aversion. And all the engineering disciplines that had to do with stuff have basically been outlawed one by one.”
“I’m not denying that the changes in digital IT over the last three decades have been breathtaking,” chimed in The Fourth Turning author Neil Howe recently. “They have been.”
But progress otherwise during his lifetime, he suggests, has been much slower than during the life of, say, Dwight Eisenhower, born in 1890. “When he was a child…you needed to know Morse code to communicate faster than a horse could run, and (in fact) horses were the only mode of ordinary street transport. Children routinely died from bacterial infections. And Lord Kelvin, one of the greatest scientists of that age, declared that ‘aeronautical travel’ was impossible.”
By the time Ike was president in the late ’50s, “he was inside in a Boeing 707… dictating memos on the deployment of hydrogen bombs, sugar-cube vaccines for polio and plans to put a ‘man on the moon’ while flying at 35,000 feet over a nation whose vast, affluent, homeowning, car-driving, union card-holding middle class would have been utterly inconceivable in the presidency of William McKinley.”
“Meanwhile,” writes Howe, “I get up every morning and drive basically the same silly internal-combustion car that people drove 50 years ago through the same suburbs on the same interstates to the same buildings powered by the same nuclear plants and hydroelectric dams that Eisenhower’s peers saw fit to build.”
He might have added — as Thiel does — that air travel has actually slowed since the last Concorde flight in 2003.
“Whenever I pick up a book that is optimistic about the future,” writes Laissez Faire Books’ Jeffrey Tucker, “it is almost a guarantee that it talks about 1) digital tech, and 2) international trends.”
“Books that are pessimistic focus on 1) the physical world, and 2) the U.S. and Europe.”
Jeffrey thinks both views are correct… for reasons he lays out in his own book, It’s a Jetsons World.
“What is hardly ever addressed,” says Mr. Tucker, “is the reason for the disparity.”
“It seems clear to me. The dead hand of government rules the physical world (and has sine World War II), while the digital world is (relatively) laissez-faire by comparison.”
“If we could burn this reality into people’s brains, the world would be a better place.”
Here’s a mind-bending proposition: Even the growth in human life span has been, some doctors argue, illusory.
Yes, average U.S. life expectancy was only 47 in 1900… growing to 78 by 2007. “But average life expectancy is heavily skewed by childhood deaths,” wrote internist Craig Bowron last winter in The Washington Post, “and infant mortality rates were high back then. In 1900, the U.S. infant mortality rate was approximately 100 infant deaths per 1,000 live births. In 2000, the rate was 6.89 infant deaths per 1,000 live births.”
“The bulk of that decline came in the first half of the century, from simple public health measures such as improved sanitation and nutrition,” he says. As a result, average life expectancy had already grown from 47 to 68 by 1950.
“I disagree pretty much entirely,” says a blunt email from our own Patrick Cox. “This type of approach is entirely wrong.”
“The impact of reduced child mortality is not the driving force in increased life spans. It is progress fighting the diseases of aging. This is not a controversial position. Child mortality hasn’t changed much in a long time. We’ve seen continuing dramatic advances in quality of life as well as length of life.”
“Things would clearly be much better,” he adds by way of acknowledging Jeffrey’s point, “if statism were not a rampant problem. But the difference in quality of life, even for the poor, in just the last generation is actually pretty stunning. Moreover, it’s about to head up the hockey stick.”
Patrick says he’s already building his presentation for this year’s Symposium in Vancouver to demonstrate why the conventional wisdom is wrong… and to show how a future of “functional immortality” is all but assured within your (currently defined) lifetime.
And that’s no matter how badly the politicians and central banks foul things up. “I’m happy to be on the opposite side of the doom and gloomers,” he adds. “It will make me look better in five or 10 years when it’s become obvious to everybody that the age of scarcity is ending.”
That’s why we love Patrick: He doesn’t hold back. He will undoubtedly have some pointed things to say in light of this year’s Symposium theme…
Addison explores this theme in his documentary project Risk! — that on the other side of financial crisis, it will be the innovators who create the new engines of wealth… that is, if they’re allowed to do so.
“Are we the generation that Western ascendancy is going to end with?” asks Niall Ferguson pointedly at the start of Civilization, his recent PBS series.
The celebrity historian will suggest some answers at our Symposium, things you won’t hear him say on TV or even in the series’ accompanying book.
Dr. Marc Faber will be back after a two-year hiatus. Fusion IQ chief Barry Ritholtz — fast becoming a favorite — will be back, along with perennial crowd-pleasers like Rick Rule.
Mr. Tucker will be making his first appearance… and along with Patrick, the Agora Financial regulars like Chris Mayer and Byron King will make return engagements.
The dates are July 24-27. We still have about 200 slots remaining, so there’s room. But we expect these seats to fill quickly — not least because the registration fee goes up as of 5:00 p.m. tomorrow.
To secure your seat and get the best available price, please review your invitation here.
Yesterday’s monster rally has carried into today. Before the open, China announced an interest-rate cut — the first since 2008.
After the open, Fed chief Ben Bernanke spoke to Congress and delivered no surprise: The Fed “remains prepared to take action as needed to protect the U.S. financial system and economy in the event that financial stresses escalate.”
Translation: The helicopter is fueled and on the pad, ready for the liftoff command when the Fed meets on June 20.
Stocks did pull back as he spoke, traders perhaps hoping Bernanke would show a little more “QE leg” than he did. Even so, at last check, the Dow has pushed past 12,500.
Small caps, while also up, are lagging.
Gold, however, surrendered a sizeable chunk of last week’s gains as Bernanke spoke. It’s back below $1,600 again — $1,589, as a matter of fact.
Silver’s back below $29.
“Gold, just like everything else, trades on a market. It goes up, it goes down,” said Addison on the radio yesterday.
He was the guest of the aforementioned Jeffrey Tucker, filling in for Peter Schiff. “When we started recommending gold, it was trading at $253 an ounce, at the end of a 20-year bear market at the end of 1999.”
The problem, and a timely reminder on a day like today? “A lot of people start treating it like an asset class. They get into a trading mentality.”
“They forget it’s insurance for the long term against a shrinking dollar.”
It’s a valuable policy — but not the only one you should consider. Addison set out to identify as many means of protecting yourself as possible… and sum them up in a handy 223 pages. For the best available deal on The Little Book of the Shrinking Dollar, give this a look.
To our ongoing chronicle of nickel-and-dime taxes and fees… we add fresh air and sunshine for your dog. Depending on how big it is.
When we checked in on Suffolk County, New York., in the fall of last year, beach goers were drowning for lack of lifeguards, the East Hampton dump was closed on Wednesdays and autumn leaf pickup hadn’t happened since 2009.
The county still faces a yawning budget gap. So now at some county dog parks, owners of dogs weighing 25 pounds or more must pay a $13 fee on weekend days between 8:00 a.m. and 4:00 p.m.
The play area for smaller dogs is still free.
“I wouldn’t call it prejudice,” big dog owner Sidney McNeil tells WNBC-TV. “I just think it’s stupid.”
[photo by “Elf”]
The county freely admits there’s no logic to charging for larger dogs. “The fee charged on the weekends is associated with parking and the amenities offered at the park, which include hiking, picnicking and horseback riding,” a spokeswoman officiously explained.
With an explanation that arbitrary… small dog owners better be ready to reach for the wallet.
“I had to go back and reread Tuesday’s 5 to see what I missed,” writes a 40-something joining the Social Security/generational-warfare fray. “Where was the part about ‘destroy the weak to advance the young’? I didn’t miss anything. It’s not in there. Some people should try reading the black parts of the text, not the white parts.”
“This is why we are in this mess. When one person says ‘think about real solutions’ and the other responds with ‘sounds like you are saying the old and disabled must be eliminated,’ politicians, who bend with the wind on a good day are only going to kick the can down the road.”
“I don’t know how you can make that leap. I took ‘real solutions’ to mean ‘living within our means.’ If that’s a ‘fearful trend’ to some people, then the situation is truly hopeless. After all, he said ‘real solutions,’ not ‘the final solution.’”
“I am an 87-year-old widow whose husband served in Europe in World War II and died of Alzheimer’s disease this past January at age 91,” writes a reader. “We worked hard all of our lives and both contributed to the Social Security fund and raised four children.”
“If our present dollar is only worth 20% of what it was worth in the late ’60s and early ’70s, then the Social Security check my father got for around $300 a month should now be worth about $1,500 a month, and I receive less than that.”
“In the past 50 years, we all have enjoyed improvements in our standard of living. Our country’s leaders got us into wars and skirmishes, but would not tax our citizens for the cost and put it on a ‘tab’ for future generations. Credit used wisely is fine, but we have to now face reality, and our debt is so large that NO ONE really understands the size of it.”
“My sincere hope is that the next generation of leaders can do a better job of management than the ones who served in the past 25 years.”
“Regarding the governing officials we ‘elect,’” writes our final correspondent: “What choice do we have?”
“I am reminded of Sen. Proxmire’s comment: ‘If my constituents had wanted an honest representative, they would have elected one.’”
The 5: Now there’s a blast from the past.
Regards,
Dave Gonigam
The 5 Min. Forecast
P.S. We have some interesting goodies in the mailbag to share with you tomorrow that have nothing to do with Social Security. If you wish to carry on that discussion, our blogsite is ready and waiting.