- Pity The Nation: War Spending Is Bankrupting America
Authored by John Whitehead via The Rutherford Institute,
“Pity the nation whose people are sheep
And whose shepherds mislead them
Pity the nation whose leaders are liars
Whose sages are silenced
And whose bigots haunt the airwaves
Pity the nation that raises not its voice
Except to praise conquerors
And acclaim the bully as hero
And aims to rule the world
By force and by torture…
Pity the nation oh pity the people
who allow their rights to erode
and their freedoms to be washed away…”
—Lawrence Ferlinghetti, poet
War spending is bankrupting America.
Our nation is being preyed upon by a military industrial complex that is propped up by war profiteers, corrupt politicians and foreign governments.
America has so much to offer—creativity, ingenuity, vast natural resources, a rich heritage, a beautifully diverse populace, a freedom foundation unrivaled anywhere in the world, and opportunities galore—and yet our birthright is being sold out from under us so that power-hungry politicians, greedy military contractors, and bloodthirsty war hawks can make a hefty profit at our expense.
Don’t be fooled into thinking that your hard-earned tax dollars are being used for national security and urgent military needs.
It’s all a ruse.
You know what happens to tax dollars that are left over at the end of the government’s fiscal year? Government agencies—including the Department of Defense—go on a “use it or lose it” spending spree so they can justify asking for money in the next fiscal year.
We’re not talking chump change, either.
We’re talking $97 billion worth of wasteful spending.
According to an investigative report by Open the Government, among the items purchased during the last month of the fiscal year when government agencies go all out to get rid of these “use it or lose it” funds: Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), lobster tail and crab ($4.6 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million).
So much for draining the swamp.
Anyone who suggests that the military needs more money is either criminally clueless or equally corrupt, because the military isn’t suffering from lack of funding—it’s suffering from lack of proper oversight.
Where President Trump fits into that scenario, you decide.
Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”
Rest assured, however, that if Trump gets his way—to the tune of a $4.7 trillion budget that digs the nation deeper in debt to foreign creditors, adds $750 billion for the military budget, and doubles the debt growththat Trump once promised to erase—the war profiteers (and foreign banks who “own” our debt) will be raking in a fortune while America goes belly up.
This is basic math, and the numbers just don’t add up.
As it now stands, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad.
Certainly, nothing about the way the government budgets its funds puts America’s needs first.
The nation’s educational system is pathetic (young people are learning nothing about their freedoms or their government). The infrastructure is antiquated and growing more outdated by the day. The health system is overpriced and inaccessible to those who need it most. The supposedly robust economy is belied by the daily reports of businesses shuttering storefronts and declaring bankruptcy. And our so-called representative government is a sham.
If this is a formula for making America great again, it’s not working.
The White House wants taxpayers to accept that the only way to reduce the nation’s ballooning deficit is by cutting “entitlement” programs such as Social Security and Medicare, yet the glaring economic truth is that at the end of the day, it’s the military industrial complex—and not the sick, the elderly or the poor—that is pushing America towards bankruptcy.
We have become a debtor nation, and the government is sinking us deeper into debt with every passing day that it allows the military industrial complex to call the shots.
Simply put, the government cannot afford to maintain its over-extended military empire.
“Money is the new 800-pound gorilla,” remarked a senior administration official involved in Afghanistan. “It shifts the debate from ‘Is the strategy working?’ to ‘Can we afford this?’ And when you view it that way, the scope of the mission that we have now is far, far less defensible.” Or as one commentator noted, “Foreclosing the future of our country should not be confused with defending it.”
To be clear, the U.S government’s defense spending is about one thing and one thing only: establishing and maintaining a global military empire.
Although the U.S. constitutes only 5% of the world’s population, America boasts almost 50% of the world’s total military expenditure, spending more on the military than the next 19 biggest spending nations combined.
In fact, the Pentagon spends more on war than all 50 states combined spend on health, education, welfare, and safety.
The American military-industrial complex has erected an empire unsurpassed in history in its breadth and scope, one dedicated to conducting perpetual warfare throughout the earth.
Since 2001, the U.S. government has spent more than $4.7 trillion waging its endless wars.
Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $32 million per hour.
In fact, the U.S. government has spent more money every five seconds in Iraq than the average American earns in a year.
Then there’s the cost of maintaining and staffing the 1000-plus U.S. military bases spread around the worldand policing the globe with 1.3 million U.S. troops stationed in 177 countries (over 70% of the countries worldwide).
Future wars and military exercises waged around the globe are expected to push the total bill upwards of $12 trillion by 2053.
The U.S. government is spending money it doesn’t have on a military empire it can’t afford.
As investigative journalist Uri Friedman puts it, for more than 15 years now, the United States has been fighting terrorism with a credit card, “essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”
War is not cheap, but it becomes outrageously costly when you factor in government incompetence, fraud, and greedy contractors.
As The Nation reports:
For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year.
For example, a leading accounting firm concluded that one of the Pentagon’s largest agencies “can’t account for hundreds of millions of dollars’ worth of spending.”
Unfortunately, the outlook isn’t much better for the spending that can be tracked.
A government audit found that defense contractor Boeing has been massively overcharging taxpayers for mundane parts, resulting in tens of millions of dollars in overspending. As the report noted, the American taxpayer paid:
$71 for a metal pin that should cost just 4 cents; $644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DoD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.
That price gouging has become an accepted form of corruption within the American military empire is a sad statement on how little control “we the people” have over our runaway government.
Mind you, this isn’t just corrupt behavior. It’s deadly, downright immoral behavior.
The U.S. government is not making the world any safer. It’s making the world more dangerous. It is estimated that the U.S. military drops a bomb somewhere in the world every 12 minutes. Since 9/11, the United States government has directly contributed to the deaths of around 500,000. Every one of those deaths was paid for with taxpayer funds.
The U.S. government is not making America any safer. It’s exposing American citizens to alarming levels of blowback, a CIA term referring to the unintended consequences of the U.S. government’s international activities. Chalmers Johnson, a former CIA consultant, repeatedly warned that America’s use of its military to gain power over the global economy would result in devastating blowback.
Those who call the shots in the government—those who push the military industrial complex’s agenda—those who make a killing by embroiling the U.S. in foreign wars—have not heeded Johnson’s warning.
The U.S. government is not making American citizens any safer. The repercussions of America’s military empire have been deadly, not only for those innocent men, women and children killed by drone strikes abroad but also those here in the United States.
The 9/11 attacks were blowback. The Boston Marathon Bombing was blowback. The attempted Times Square bomber was blowback. The Fort Hood shooter, a major in the U.S. Army, was blowback.
The transformation of America into a battlefield is blowback.
All of this carnage is being carried out with the full support of the American people, or at least with the proxy that is our taxpayer dollars.
The government is destabilizing the economy, destroying the national infrastructure through neglect and a lack of resources, and turning taxpayer dollars into blood money with its endless wars, drone strikes and mounting death tolls.
As Martin Luther King Jr. recognized, under a military empire, war and its profiteering will always take precedence over the people’s basic human needs.
Similarly, President Dwight Eisenhower warned us not to let the profit-driven war machine endanger our liberties or democratic processes.
“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?”
We failed to heed Eisenhower’s warning.
The illicit merger of the armaments industry and the government that Eisenhower warned against has come to represent perhaps the greatest threat to the nation today.
It’s not sustainable, of course.
Eventually, inevitably, military empires fall and fail by spreading themselves too thin and spending themselves to death.
It happened in Rome. It’s happening again.
The America empire is already breaking down.
We’re already witnessing a breakdown of society on virtually every front, and the government is ready.
For years now, the government has worked with the military to prepare for widespread civil unrest brought about by “economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”
For years now, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.
We’re approaching critical mass.
As long as “we the people” continue to allow the government to wage its costly, meaningless, endless wars abroad, the American homeland will continue to suffer: our roads will crumble, our bridges will fail, our schools will fall into disrepair, our drinking water will become undrinkable, our communities will destabilize, our economy will tank, crime will rise, and our freedoms will suffer.
So who will save us?
As I make clear in my book, Battlefield America: The War on the American People, we’d better start saving ourselves: one by one, neighbor to neighbor, through grassroots endeavors, by pushing back against the police state where it most counts—in our communities first and foremost, and by holding fast to what binds us together and not allowing politics and other manufactured nonrealities to tear us apart.
Start today. Start now. Do your part.
Literally and figuratively, the buck starts and stops with “we the people.”
- Australians Are Furious About Google's Delivery Drone
Google’s parent company Alphabet Inc. is on the verge of launching what the Australian Broadcasting Corporation (ABC) says will be the world’s first commercial drone delivery service in Australia.
Wing, a subsidiary of Alphabet has been testing its drone delivery service over Bonython, a suburb of Tuggeranong, a township in southern Canberra. The year-long trial, called Project Wing, wrapped up last week; now the company is planning for a commercial launch in June.
Wing says its drones will be able to deliver small items, such as food and medication, but residents of Canberra, where the program was tested and will soon be ready for commercial flight, are furious about drones buzzing above.
Here is how Wing’s drone works
Alphabet and Wing are expected to face a fierce fight before the delivery program takes off, according to ABC.
In response to the public backlash, Wing recently tested a quieter version of its delivery drone.
“We’re trying to be as transparent and as open as we can,” Project Wing CEO James Burgess told the Canberra Times.
Many Bonython residents told local Government officials the invasive drones had brought people to madness, and residents told police if the government did not intervene, they would shoot the drones out of the sky.
“It is not inevitable, if the Government can be convinced that the great majority of Canberrans don’t want it,” local Neville Sheather said.
Sheather leads Bonython Against Drones, a group that is trying to stop the progress of Alphabet and Wing from commercializing the delivery service.
Even some advocates of drones, like Professor Roger Clarke, have said Project Wing had developed too quickly.
“We’ve got to get the different segments of the public represented in these discussions, and they haven’t been,” Professor Clarke said.
Clarke said Project Wing had been rushed through testing and is not following the traditional process of assessing new technologies.
“Things fall out of the sky, it’s quite hard to get drones to work properly, it’s quite hard to deal with drones when they lose communications … we should be treating it that way and applying the precautionary principle and getting out ahead of the problem.”
Australian Capital Territory Minister Andrew Barr denied claims the government was allowing Project Wing to be expedited during the testing phase.
Instead, he warned that if Canberra and its residents did not accept the drone delivery service, it would fall behind the technological curve.
“Our choice is are we involved, are we trialing, are we engaging, are we finding ways to make this technology work in a way that benefits people, or are we just going to sit back and let it happen?” he said.
Wing and Google are currently waiting for government approval to begin their next test in Gungahlin, limited to five suburbs: Crace, Palmerston, Franklin, Gungahlin, and Mitchell.
The company expects to start drone deliveries midway this year.
Just wait until drone delivery services come to the US. The public backlash will be much worse.
- A Skeptic's Guide To The Russiagate Fixation
Authored by Aaron Maté via TheNation.com,
Robert Mueller has yet to allege collusion, and Democrats who accuse Trump of being a Kremlin conspirator are silent when his policies escalate tensions with Russia…
As we await the rumored delivery of special counsel Robert Mueller’s final report, it is looking increasingly unlikely that the document will allege a Trump-Russia conspiracy. To date, Mueller’s numerous indictments and voluminous court filings have not accused a single American of collusion with Russia. And, tellingly, prominent media and political voices, who have spent two years raising expectations that Mueller will find collusion, are now quietly moving the goalposts.
A significant hurdle in the hunt for collusion is that every close associate to “flip” on President Donald Trump has stated that they did not witness it.
In his recent congressional testimony, former Trump fixer Michael Cohen said that he has seen no evidence of Trump-Russia collusion, and knocked down several pillars of the conjecture surrounding it. In re-avowing that he has never been to Prague, Cohen rebuked a central claim of the Steele dossier that he traveled there to pay off Russian hackers. Cohen’s denial deals a serious blow to the credibility of the dossier’s author, Christopher Steele. It also underscores the credulousness of FBI officials, members of Congress, and the many news outlets that relied on and amplified Steele’s material. Cohen also poured cold water on suspicions fueled by Steele that Russians have compromising material on Trump.
There are differing perspectives on how Cohen addressed another “bombshell” at which he was at the center. In January, Buzzfeed Newsreported that Mueller has evidence that President Trump directed Cohen to lie to Congress about the failed Trump Tower real-estate project in Moscow. The story triggered wall-to-wall news coverage until Mueller’s office issued an unprecedented statement that called Buzzfeed’s reporting “not accurate.” Cohen echoed Mueller’s denial by asserting that “Trump did not directly tell me to lie to Congress.” When pressed on why he never corrected the Buzzfeed story and the multiple outlets that echoed it, Cohen responded, “We are not the fact-checkers for BuzzFeed.”
Buzzfeed nonetheless claimed vindication because Cohen also told Congress that he had lied after inferring from Trump’s public and private statements that the president wanted him to. Buzzfeed’s editor in chief, Ben Smith, argued that Cohen had confirmed the story because one of its “core central pieces” was that “Cohen thought he had been told to lie.” But that is not what Buzzfeed had originally reported: The story claimed—and prompted impeachment talk as a result—that Trump had suborned perjury by “explicitly telling [Cohen] to lie” and because he “personally instructed [Cohen] to lie.” Assigning those actions directly to Trump hardly conforms to Cohen’s explanation that he had merely intuited or interpreted Trump’s intentions.
However one construes Cohen’s comments, his testimony also undercut the innuendo and conjecturetriggered by reports that the Trump Organization planned to offer Vladimir Putin a $50 million penthouse apartment. Cohen dismissed it as “a marketing stunt” proposed by his colleague Felix Sater, and deflated speculation that Trump was involved.
As Cohen fails to offer a collusion smoking gun, proponents of the collusion theory continue to hope one emerges in the case of former campaign chair Paul Manafort. In January, it emerged that Mueller has accused Manafort of lying to his team about sharing Trump polling data with his Ukrainian-Russian fixer, Konstantin Kilimnik, at some point during the 2016 campaign. According to Mueller, the FBI assesses that Kilimnik has an unspecified “relationship with Russian intelligence.” The alleged lie, a Mueller prosecutor told the court, goes to “the heart” of the special counsel’s mandate.
No indictments have resulted from this issue, and it makes no appearance in Mueller’s two sentencing memos in Manafort’s case. There is also the fact that, although sharing polling data with a Russian associate could theoretically go to “the heart” of the Mueller probe, Manafort’s actual case has nothing to do with it. As Virginia Judge T.S. Ellis noted at Manafort’s first sentencing last week, Manafort “is not before this court for anything having to do with collusion with the Russian government.” Manafort was instead accused and convicted of financial crimes stemming from his lobbying work in Ukraine. In sharing the polling data, The New York Timesnoted, Manafort “might have hoped that any proof he was managing a winning candidate would help him collect money he claimed to be owed for his work on behalf of the Ukrainian parties.”
If the the polling data is evidence of Trump-Russian collusion, or even if Kilimnik is an actual Russian intelligence official, then Mueller has yet to allege it. Manafort’s attorneys previously asked Mueller for any discovery showing contacts between Manafort and “Russian intelligence officials,” but were told that “there are no materials responsive to [those] requests.” The DC judge overseeing the case, Amy Berman Jackson, says, “Whether Kilimnik is tied to Russian intelligence or he’s not… I have not been provided with the evidence that I would need to decide.” Jackson has only ruled that Manafort’s alleged lie is material to the scope of Mueller’s inquiry. The language in Mueller’s appointment order, she ruled, “is sufficiently broad to get over the relatively low hurdle of materiality in this instance.”
That makes any relevance of the polling-data issue to collusion entirely speculative, but that is not how it has been treated. Virginia Democratic Senator Mark Warner, the vice chair of the Senate Intelligence Committee, dubbed Manafort’s sharing of polling data “the closest we’ve seen yet to real, live, actual collusion.” If Warner is correct, then his assessment only makes clear just how far the Russia probe remains from actual collusion.
Warner’s House Intelligence counterpart, Representative Adam Schiff (D-CA), does not fare better. Asked by CBS News if he has “direct evidence” of Trump-Russia collusion, Schiff cited the infamous e-mail sent by music publicist Rob Goldstone offering Donald Trump Jr. compromising information about Hillary Clinton on the Russian government’s behalf. But by Goldstone’s own account, his overture to Trump Jr. was “publicist puff,” and his claims of Russian government support for Trump were invented out of thin air: “I had no idea what I was talking about,” he told NPR last year. To date, Mueller has given us no reason to challenge that assessment. Goldstone and every other participant in the Trump Tower meeting has been questioned by Congress or Mueller; none have faced any charges related to it. In short, if Goldstone’s letter is “direct evidence” of a crime, Mueller has yet to allege it.
If this is the most damning evidence that the Democrats’ top Russia investigators can adduce, it is no wonder that the bipartisan Senate Intelligence probe has “uncovered no direct evidence of a conspiracy between the Trump campaign and Russia,” as NBC News reported last month. And amid rumblings that Mueller is wrapping up his investigation, it is also no wonder that Schiff and others who have ceaselessly promoted the Trump-Russia collusion theory are preparing their audiences for a letdown.
While insisting that there is “pretty compelling evidence” of collusion, Schiff now hedges by cautioning that Democrats should not attempt to impeach Trump “in the absence of very graphic evidence.” Asked by ABC News if he would accept it if Mueller “says definitively we find no collusion,” Representative Jerry Nadler (D-NY) said that we can “agree or disagree. But this investigation goes far beyond collusion.” After two years of our hearing about the “beginning of the end” for Trump, several outlets now proclaim that it’s in fact “the end of the beginning.” CNN legal analyst Renato Marrioti instructs his followers that “Mueller’s report will almost certainly disappoint you, and it’s not his fault. It’s your fault for buying into Trump’s false narrative that it is Mueller’s job to prove ‘collusion.’” It certainly cannot be the fault of pundits like himself who have argued that “collusion” has already been established, or even charged.
Both Schiff and Nadler have now launched what two major outlets have described as “turbocharged” and “supercharged” congressional probes of Trump’s ties to Russia and alleged corruption. Perhaps they will uncover evidence that federal investigators have missed. Given that both probes are covering ground that the exhaustive and more powerful Mueller inquiry has already traversed, it would be wise not to get our hopes up.
Caution seems all the more prudent as Trump-Russia innuendo continues to overshadow the very real dangers in US-Russia relations. There has been a noted absence of media and political pushback (with some exceptions) to Trump’s withdrawing the United States from the INF Treaty with Russia, despite the increasing threat of a renewed arms race between the two Cold War powers. The Trump administration is escalating its opposition to the Nord Stream 2, a massive German-Russia pipeline project, by reportedly preparing to impose sanctions on it. More than two-dozen Senate Democrats have endorsed a bill that joins Trump in calling for the project’s cancellation. Trump’s ongoing coup attempt against Russia’s ally Venezuela has not only received a tepid Democratic response (also with some exceptions), but even support from party stalwarts including Representatives Schiff (CA), Nancy Pelosi (CA), Eliot Engel (NY), former vice president Joe Biden, former president Bill Clinton, and Senators Chuck Schumer (NY) and Dick Durbin (IL).
Democratic support for the hawkish foreign policy of a Republican White House is nothing new. The current dynamic, however, is unprecedented. Democrats and their media partisans frequently accuse the president of being soft on Russia or even a Kremlin conspirator, while simultaneously falling silent—or even offering an endorsement—when his reckless policies build tensions. That Trump’s dangerous moves against Russia are being overlooked amid the drive to prove that he and Putin are secretly in cahoots is one more reason to treat the Russiagate fixation with skepticism. Based on what it has yielded to date, the Mueller probe’s outcome may soon be another.
- Trump Races To Secure Billions For Hypersonic Missiles
The Pentagon has requested a record-breaking $718 billion in its fiscal 2020 budget, a 5% increase over what Congress allocated for fiscal 2019, as per the Russian Times.
The White House published the details of President Donald Trump’s new fiscal budget request on Monday, requesting a massive $750 billion for national defense. About $30 billion for nuclear weapons programs under the Department of Energy.
The $718 billion budget includes a base budget of $544.5 billion, $9.2 billion for the border wall and $164 billion for foreign wars.
A sizeable portion of the funding will be used to operate multiple research and development programs, as the Pentagon is determined to mature and launch series production for new weapons and technologies, such as hypersonic missiles and fifth-generation fighters.
“With the largest research and development request in 70 years, this strategy-driven budget makes necessary investments in next-generation technology, space, missiles, and cyber capabilities,” Acting Secretary of Defense Patrick M. Shanahan said.
The funding boost is needed to “strongly position the US military for great power competition for decades to come,” he added.
The funding includes $2.6 billion for hypersonic missiles that “complicate adversaries’ detection and defense,” another $3.7 billion for unmanned and even autonomous systems suitable for “contested regions.
Hypersonic missiles cruise at Mach 5 or faster, or about five times faster than the speed of sound. As of 2019, the Pentagon doesn’t have missile defense systems that can stop a hypersonic attack nor has hypersonic missiles that are deployed with forces.
On the other hand, Russia last year sent its hypersonic weapons into series production and has already deployed missiles to its forces stationed around the country.
The threat of a hypersonic missile attack made the Pentagon cut the word “ballistic” from its recent iteration of the “Missile Defense Review,” which was published last month. The last review, in 2010, was titled, “Ballistic Missile Defense Review.”
“We are now recognizing the nature of missile threats to both the United States homeland, as well as to friends and allies abroad and our deployed forces go beyond just ballistic missiles,” said Deputy Under Secretary of Defense for Policy David J. Trachtenberg said February 1 at CSIS.
It’s now clear that the Trump administration and Pentagon are urgently requesting billions of dollars in taxpayers funds to build hypersonic missiles before the next conflict explodes.
- Here’s How Much Your Healthcare Costs Rise As You Age
Submitted by Priceonomics
Imagine working your entire life with the plan to retire at the age of 65, only to declare bankruptcy due to medical costs and losing all your assets.
This isn’t some unlikely nightmare scenario; the rate of senior citizens declaring bankruptcy has more than doubled since 1999, and the leading cause is high healthcare costs. Despite the existence of Medicare insurance for seniors, it doesn’t cover all costs and healthcare can be extremely expensive, especially as you age.
In this analysis, we decided to look at the most recent data on how healthcare spending increases as you age along with Priceonomics customer RegisteredNursing.org. The goal of this is for people to understand just how much higher healthcare costs are the older you get and how sensitive they are to medical inflation rates.
By the time you reach 65 years old, average healthcare costs are $11.3K per person, per year in the United States. This is nearly triple the annual average cost of when you’re in your 20s and 30s. During your adult lifetime, average spending for women is nearly twice as high as for men. Healthcare spending for minority groups like Black and Hispanic Americans is approximately 30% less than on White Americans.
During one’s lifetime, over $400K will be spent on the average American’s healthcare in today’s dollars. And that is if medical costs rise as the same rate as inflation. If medical costs rise at 3% more than inflation, your healthcare will cost over $2MM, the vast majority of which will take place after the age of 45.
Even if your insurance company or Medicare covers most of that bill, the typical American can still be on the hook for a very large sum of money to cover their healthcare costs as they age.
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The Department of Health and Human Services commissions a detailed survey of medical costs dating back to 1999 all the way up to 2016 most recently. The data set, The Medical Expenditure Panel Survey (MEPS), provides detailed healthcare spending data segmented by age and demographics, among other things. The spending figures noted as total average spending per individual, regardless of who is paying it (the insurance company, the individual directly, or some combination between).
When budgeting for your retirement, it’s tempting to think your costs may be much lower in old age. Afterall, your kids may (hopefully) be financially self-sufficient adults and the mortgage on your home may be paid off.
But the big unknown is healthcare expenses. It turns out as you age, your annual healthcare costs go up a lot and despite having insurance you may be on the hook for copays, deductibles, and all sorts of things that aren’t actually covered.
The MEPS data set shows the average spending per person in the United States based on their age group.
It turns out being born is somewhat expensive and childhood costs peak when you’re under five years old. Healthcare costs are lowest from age 5 to 17 at just at $2,000 per year on average. From then on it’s a steady increase, however, with costs rising to over $11,000 per year when you’re over 65 years old.
The costs of your care may be mostly covered by private insurance or Medicare, but not all costs are always covered and an unexpected bill can have devastating effects on your finances. As one senior citizen relates on their traumatic experience with health insurance:
“My bankruptcy started with back surgery. I had several medical tests that my insurance did not cover. This caused me to fall behind in my medical payments. The next thing I knew, the bills began piling up. I got to the point I owed more than I was making on Social Security.”
Healthcare costs are not evenly distributed. You could be among the tragically unlucky with much higher costs. But not only that, but healthcare spending varies substantially by gender and demographic.
At each stage of life, health care spending for women is substantially higher than for men. The need for more gerontology nurse practitioners and wnhp in the coming years will be vitally important to the success of healthcare programs.
During time period of age 18 to 44, health spending for females is 84% higher than men for years. Yes, much of this is due to the expense of childbirth, but from age 44 to 64 spending for women is 24% higher than for men and even at age 65+ spending for women is 8% higher.
According to this data, women will need to budget more than men for health care expenses each year. Not only that but women tend to live two more years than men in the United States which requires additional savings. The MEPS data also reveals tremendous inequality in healthcare spending by race and demographic. The following chart shows average spending by demographic group for adults in America:
There is an average of $3.6K annual healthcare spending on white adult Americans, approximately 70% higher than for Asian, Black, and Hispanic Americans. The root cause and implications of this unequal spending should be studied much further to see if their remedy can improve healthcare outcomes for all.
So if we add up all these annual spending figures how much will your healthcare cost over the course of your lifetime? In today’s dollars, if you’re “average”, you can expect it to cost $414K.
The following chart shows this total spending during various ages in your life. Nearly two-thirds of one’s healthcare spending takes place after your 45th birthday:
However, there is a lot of reason to believe this estimate of $414K spent on your healthcare is being conservative. First of all, it’s for the “average” person. If you have a health catastrophe, your healthcare spending may be tremendously higher. Second, the above figures assume that healthcare costs in the future increase as the same rate as inflation to arrive at the $414K spending in today’s dollars.
There is a lot of data to suggest that healthcare costs in the United States have been increasing much faster than inflation. One estimate is that over the last two decades, healthcare costs have increased twice as fast as inflation.
Since projecting future healthcare costs is an impossible task to pinpoint with any accuracy, let’s show how much the cost of your healthcare will be under various assumptions about healthcare cost growth rates. The following chart shows how much your lifetime healthcare spending will be if healthcare spending grows at the same rate as inflation versus if it grows slightly faster.
If healthcare costs increase just one percentage point faster than inflation, the total bill for your healthcare will be $710K, and even that could be a conservative estimate. If healthcare costs rise at three percentage points more than inflation your lifetime healthcare costs will exceed two million dollars!
If this chart isn’t a good reason for why healthcare in America needs to be reformed, perhaps nothing is. Even small increases in healthcare spending rates result in runaway costs for your lifetime healthcare bill. You and your insurance company might be able to plan for a scenario where your lifetime healthcare bill is half a million dollars, but how about if it’s more than seven million dollars?
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As this analysis shows, your healthcare spending is tremendously expensive. Perhaps you might have great health insurance, but if money is spent on your healthcare, someone is paying for it. In large part you pay for it via healthcare premiums, but if that doesn’t cover it then other people’s premiums or taxes will. Either way, high healthcare costs mean high spending for someone. Not only that, but even with the best health insurance, senior citizens are often hit with expensive co-pays or need drugs that their plans won’t cover. These unexpected and large expenses can often wreck one’s finances and result in bankruptcy. As you save up for retirement, it’s important to understand the value of having savings for your future medical expenses, which would be much higher than they are today.
- Libya's "Gaddafi 2.0" Eyes Military Takeover Of Tripoli, Could Rattle Global Oil Markets
Libya is coming apart again — though of course it was never put back together in the first place after NATO’s regime change war to topple Muammar Gaddafi in 2011 in the first place. Since then it’s been a jihadist wasteland of three, or at times up to four, competing governments vying for control of land and resources.
And now, as Bloomberg reports this week “Libya’s most powerful warlord has his sights on the capital” of Tripoli and “even his international backers are nervous.” Who are Khalifa Haftar’s international backers? He was for a couple decades believed to be on the CIA’s payroll while living in suburban Virginia outside Washington, D.C. in exile during Gaddafi’s rule. He’s also financed by the UAE and quickly emerged as a main player collecting the spoils in the aftermath of the US-French-NATO bombing campaign in support of the rebels.
Libyan General Khalifa Haftar. Image source: Middle East Monitor Based in Libya’s oil-rich east, Haftar’s militia has already captured much of the country’s oil resources, especially after a successful blitz to take much of the south this year.
And now he reportedly has his eye on the capital of Tripoli in the west — home to the UN-recognized Government of National Accord (GNA) and Libya’s state-run National Oil Corporation, which when combined with small subsidiaries under its direction accounts for some 70% of the country’s oil output.
But has an increasingly powerful Haftar gone rogue, outside the bounds of his international political and financial backers? Or is he actually the external brokers’ “solution” to impose order after years of post-Gaddafi chaos? Are we witnessing the rise of Libya’s new strongman — a Gaddafi 2.0 who will be amendable to western and gulf interests?
Bloomberg reports the growing alarm of his international backers:
Alarmed, international powers are clamoring to avert a military showdown that could rattle global oil markets and sow further chaos in a divided country already struggling to defeat Islamic State and stem the flow of migrants toward Europe.
The UAE has reportedly tried to intervene with Haftar, urging him to put on the brakes and negotiate a power sharing situation, but to no avail.
Haftar’s forces, known as the Libyan National Army (LNA), have continued bulldozing their way across the country at lightning pace:
But Haftar has continued to indicate that an offensive on Tripoli is looming, according to three Western diplomats who declined to be named. Rumors his self-styled Libyan National Army is building up troops and weapons in the west are adding to the anxious mood. LNA spokesman Ahmed al-Mismari said as recently as February that elections could only take place once the whole country was secure.
“We should be in no doubt that everything Haftar has done until now has been to get to Tripoli, to be the man in Tripoli,” said Mohamed Eljarh, co-founder of Libya Outlook for Research and Consulting, a think-tank based in the east. He’s likely to continue planning for a takeover “whether peacefully or violently.”
Interestingly, Haftar has also enjoyed the political backing of an unlikely assortment of powerful countries that include Russia, France, and Egypt. This is due to his purported secular identity and political platform, and his willingness to fight the jihadists, including Libyan ISIS.
As a “secular autocrat” with external backing and potentially “West-friendly”, he precisely fits the model of a nationalist type dictator uniting the various large feuding tribes in the mold of Gaddafi (the late Libyan 42-year ruler himself at various times enjoyed the backing of European powers).
Libyan oil fields, pipelines, refineries and storage, via Wiki Commons. Bloomberg reports further his LNA already has immense leverage as a potential military and political showdown with Tripoli GNA officials looms:
Already in control of Libya’s main oil-exporting terminals, the LNA has secured its biggest oil field since beginning its southern campaign in January. That puts Haftar in control of more than 1 million barrels of production a day, giving him crucial leverage over the OPEC member’s key source of income as well as command of its most powerful fighting force.
Post-Gaddafi Libya has been largely forgotten about in the media after its “liberation” by NATO and Islamist militants, and since 2011 has existed in varying degrees of anarchy and chaos. Libya has remained split between rival parliaments and governments in the east and west, with militias and tribes lining up behind each, resulting in fierce periodic clashes.
The most significant of these warring militias nationwide has long been Haftar’s LNA, which has for the past couple years controlled much of eastern Libya and emerged as the chief rival to the UN-backed GNA in the western half of the country.
Haftar has since 2017 been reported to be planning a move on Libya’s vital “oil crescent region” while bolstering his forces with Chadian mercenaries, according to prior local reports. Now largely successful in this endeavor, control of the capital would constitute the endgame allowing him to solidify rule over all portions of the country.
Prior the 2011 Libyan war and NATO military intervention which ultimately led to the field execution of Muammar Gaddafi, the country produced about 1.6 million bpd, but years of turmoil and political instability in the aftermath have slashed that to 550,000 barrels per day as of 2018 output numbers.
- FEMA Contractor Arrested For Cocaine Distribution… To Kids
Authored by John Paul Hampstead via FreightWaves.com,
Joseph Lipsey III, CEO of Chattanooga-based transportation companies Lipsey Logistics and Lipsey Trucking, was arrested on Tuesday in Aspen, CO, for distribution of cocaine to a minor, three counts of serving alcohol to a minor, possession of drug paraphernalia, and providing nicotine to minors. Lipsey’s wife Shira and son, Joseph Lipsey IV, were arrested Monday on similar counts.
Under Colorado law, if convicted of the distribution charge, the Lipsey parents would each face a mandatory sentence of between eight and 32 years in prison.
The Lipseys were each released on $100,000 cash-only bonds. In January, Joseph Lipsey IV was charged with two counts of vehicular assault after a Tesla SUV he was alleged to have been driving careened off the road, injuring himself and four other teens in the car.
The Lipseys saw an opportunity in freight brokerage when the second Bush administration began privatizing and outsourcing disaster relief, where previously the federal government had leaned on the military.
A small water company in the family’s portfolio helped the Lipseys secure an award to provide bottled water for hurricane relief.
In 2003, Lipsey had engaged UPS for Federal Emergency Management Agency (FEMA) logistics and transportation support for disaster relief, but almost immediately Hurricane Isabel hit the global logistics conglomerate realized that the task of providing disaster relief logistics was more realistic with an asset-based truckload provider than through independent brokerage capacity. UPS handed over the business to US Xpress, which managed relief logistics on behalf of Lipsey.
Joe Lipsey soon realized that there was a lot of money to be made in using brokerage capacity and by the 2005 hurricane season, the Lipseys had launched their own brokerage to move water and ice on a cost-plus basis for the government.
Lipsey Logistics has been investigated on numerous occasions for failure to comply with federal rules around deadlines, botched paperwork, and according to a government investigation, in billing more than $800,000 in unsupported Federal payments.
On September 5, 2017, Lipsey Water was awarded a $143 million FEMA contract to provide bottled water. As of October 2017, Bloomberg reported that Lipsey won at least $215 million in FEMA relief services since Hurricane Harvey.
“Lipsey Logistics’ sister company, Lipsey Water, has numerous State and Federal emergency contracts providing Disaster Relief Services to communities affected by disasters, both natural and manmade. While working with thousands of carriers for FEMA relief, Lipsey quickly realized the need for a reliable logistics organization to manage the delivery of water, ice, and durable goods. Thus, Lipsey Logistics Worldwide was formed,” the company said on its website.
If the cocaine charges stick, Lipsey’s government contracts could be under threat. FreightWaves estimates that Lipsey was able to build a nearly $200 million per year transportation and logistics operation on the back of FEMA and state government contracts. Not all of Lipsey’s logistics business is from FEMA. The firm, benefitting from being located in Chattanooga, has hired brokerage and trucking staff from truckload giants US Xpress, Covenant Transport, and Coyote Logistics. Major clients that Lipsey have provided 3PL services include Home Depot, Niagara Waters, and Proctor & Gamble.
Reporting by the Aspen Times based on police accounts depicted the Lipsey’s’ Aspen home as a sordid drug den. According to a police affidavit, during a February 19 search of the Lipsey home, officers and deputies found charred tin foil, a crystalline powder-caked spoon, baggies of white powder that tested positive for cocaine, unprescribed Xanax pills, and codeine syrup.
Needless to say, the prospect of multiple felony drug convictions, especially ones involving kids, puts Lipsey Logistics’ federal contracts under threat.
- China's Looming Liquidity Shortage (Or Why Endless Stimulus Isn't Working)
Chinese Premier Li promised yet more stimulus measures overnight from tax cuts to focused rate reductions (but, he admitted, not blanket liquidity provision).
But, after over 60 different ‘stimulus’ measures in the last few months and last night’s promises, nothing seems to be working as China’s economic data continues to tumble.
As Goldman’s Andrew Tilton (Chief Asia Economist) suggested:
“There are reasons to be concerned [that easing is becoming less effective]. Local government officials who typically implement infrastructure spending and other forms of stimulus are facing conflicting pressures. The emphasis in recent years on reducing off-balance-sheet borrowing, selecting only higher-value projects, and eliminating corruption has made local officials more cautious. But at the same time, the authorities are now encouraging local officials to do more to support growth, like accelerate infrastructure projects. President Xi himself recently acknowledged the incentive problems and administrative burdens facing local officials.”
And Nomura’s Ting Lu has an explanation for why China stimulus i snot working…
Chinese easing- / stimulus- escalation being a likely requirement for any sort of “reflation” theme to work beyond a tactical trade:
yes, more RRR cuts are coming eventually (a better way for Chinese banks to obtain liquidity vs borrowing from MLF or TMLF, bc it’s cheaper and more stable)…
…but that the timing of such a cut is primarily dependent on the Chinese stock market, as the “re-bubbling” happening real-time in Chinese Equities (CSI 300 +26.8% YTD; SHCOMP +24.4%; SZCOMP +34.0%) likely then constrains the room and pace of Beijing’s policy easing / stimulus
This “Chinese Equities rally effectively holding further RRR cuts hostage” then could become a serious “fly in the ointment” for near-term / tactical “reflation” (or bear-steepening) themes, as Q2 is on-pace to see a significant liquidity shortage.
Ting estimates the liquidity gap could reach ~ RMB 1.7T in Q2 due to the following factors:
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The size of the upcoming MLF maturities (est to be ~RMB 1.2T in Q2);
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The size and pace of (both central and local) government bond issuance (Nomura ests a target of ~ RMB 1T for Q2);
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Tax season effects; and
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The shortage of money supply through the PBoC’s FX purchases
CHINA’S COMING Q2 LIQUIDITY-SHORTAGE:
So, simply put, China is merely refilling a rapidly leaking bucket of liquidity, as opposed to sloshing more into the bath of global risk – even if Chinese stocks were embracing it.
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- Artificial Intelligence Or Real Stupidity?
Authored by David Robertson via RealInvestmentAdvice.com,
It’s hard to go anywhere these days without coming across some mention of artificial intelligence (AI). You hear about it, you read about it and it’s hard to find a presentation deck (on any subject) that doesn’t mention it. There is no doubt there is a lot of hype around the subject.
While the hype does increase awareness of AI, it also facilitates some pretty silly activities and can distract people from much of the real progress being made. Disentangling the reality from the more dramatic headlines promises to provide significant advantages for investors, business people and consumers alike.
Artificial intelligence has gained its recent notoriety in large part due to high profile successes such as IBM’s Watson winning at Jeopardy and Google’s AlphaGo beating the world champion at the game “Go”. Waymo, Tesla and others have also made great strides with self-driving vehicles. The expansiveness of AI applications was captured by Richard Waters in the Financial Times [here}: “If there was a unifying message underpinning the consumer technology on display [at the Consumer Electronics Show] … it was: ‘AI in everything’.”
High profile AI successes have also captured people’s imaginations to such a degree that they have prompted other far reaching efforts. One instructive example was documented by Thomas H. Davenport and Rajeev Ronanki in the Harvard Business Review [here]. They describe, “In 2013, the MD Anderson Cancer Center launched a ‘moon shot’ project: diagnose and recommend treatment plans for certain forms of cancer using IBM’s Watson cognitive system.” Unfortunately, the system didn’t work and by 2017, “the project was put on hold after costs topped $62 million—and the system had yet to be used on patients.”
Waters also picked up on a different message – that of tempered expectations. In regard to “voice-powered personal assistants”, he notes, “it isn’t clear the technology is capable yet of becoming truly useful as a replacement for the smart phone in navigating the digital world” other than to “play music or check the news and weather”.
Other examples of tempered expectations abound. Generva Allen of Baylor College of Medicine and Rice University warned [here], “I would not trust a very large fraction of the discoveries that are currently being made using machine learning techniques applied to large sets of data.” The problem is that many of the techniques are designed to deliver specific answers and research involves uncertainty. She elaborated, “Sometimes it would be far more useful if they said, ‘I think some of these are really grouped together, but I’m uncertain about these others’.”
Worse yet, in extreme cases AI not only underperforms; it hasn’t even been implemented yet. The FT reports [here], “Four in 10 of Europe’s ‘artificial intelligence’ startups use no artificial intelligence programs in their products, according to a report that highlights the hype around the technology.”
Cycles of inflated expectations followed by waves of disappointment come as no surprise to those who have been around artificial intelligence for a while: They know all-too-well this is not the first rodeo for AI. Indeed, much of the conceptual work dates to the 1950s. In reviewing some of my notes recently I came across a representative piece that explored neural networks for the purpose of stock picking – dated from 1993 [here].
The best way to get perspective on AI is to go straight to the source and Martin Ford gives us that opportunity through his book, Architects of Intelligence. Organized as a succession of interviews with the industry’s leading researchers, scholars and entrepreneurs, the book provides a useful history of AI and highlights the key strands of thinking.
Two high level insights emerge from the book.
One is that despite the disparate backgrounds and personalities of the interviewees, there is a great deal of consensus on important subjects.
The other is that many of the priorities and concerns of the top AI researches are quite noticeably different from those expressed in mainstream media.
Take for example, the concept of artificial general intelligence (AGI). This is closely related to the notion of the “Singularity” which is the point at which artificial intelligence matches that of humans – on its path to massively exceeding human intelligence. The idea has captured people’s concerns about AI that include massive job losses, killer drones, and a host of other dramatic manifestations.
AI’s leading researchers have very different views; as a group they are completely unperturbed by AGI.
Geoffrey Hinton, Professor of computer science at the University of Toronto and Vice president and engineering fellow at Google said, “If your question is, ‘When are we going to get a Commander Data [from the Star Trek TV series]’, then I don’t think that’s how things are going to develop. I don’t think we’re going to get single, general-purpose things like that.”
Yoshua Bengio, Professor of computer science and operations research at the University of Montreal, tells us that, “There are some really hard problems in front of us and that we are far from human-level AI.” He adds, “we are all excited because we have made a lot of progress on climbing the hill, but as we approach the top of the hill, we can start to see a series of other hills rising in front of us.”
Barbara Grosz, Professor of natural sciences at Harvard University, expressed her opinion, “I don’t think AGI is the right direction to go”. She argues that because the pursuit of AGI (and dealing with its consequences) are so far out into the future that they serve as “a distraction”.
Another common thread among the AI researches is the belief that AI should be used to augment human labor rather than replace it.
Cynthia Breazeal, Director of the personal robots group for MIT media laboratory, frames the issue: “The question is what’s the synergy, what’s the complementarity, what’s the augmentation that allows us to extend our human capabilities in terms of what we do that allows us to really have greater impact in the world.”
Fei-Fei Li, Professor of computer science at Stanford and Chief Scientist for Google Cloud, described, “AI as a technology has so much potential to enhance and augment labor, in addition to just replace it.”
James Manyika, Chairman and director of McKinsey Global Institute noted since 60% of occupations have about a third of their constituent activities automatable and only about 10% of occupations have more than 90% automatable, “many more occupations will be complemented or augmented by technologies than will be replaced.”
Further, AI can only augment human labor insofar as it can effectively work with human labor.
Barbara Grosz pointed out, “I said at one point that ‘AI systems are best if they’re designed with people in mind’.” She continued, “I recommend that we aim to build a system that is a good team partner and works so well with us that we don’t recognize that it isn’t human.”
David Ferrucci, Founder of Elemental Cognition and Director of applied AI at Bridgewater Associates, said, “The future we envision at Elemental Cognition has human and machine intelligence tightly and fluently collaborating.” He elaborated, “We think of it as thought-partnership.” Yoshua Bengio reminds us, however, of the challenges in forming such a partnership: “It’s not just about precision [with AI], it’s about understanding the human context, and computers have absolutely zero clues about that.”
It is interesting that there is a fair amount of consensus regarding key ideas such as AGI is not an especially useful goal right now, AI should be applied to augment labor and not replace it, and AI should work in partnership with people. It’s also interesting that these same lessons are borne out by corporate experiences.
Richard Waters describes how AI implementations are still at a fairly rudimentary stage in the FT [here]:
“Strip away the gee-whizz research that hogs many of the headlines (a computer that can beat humans at Go!) and the technology is at a rudimentary stage.”
He also notes, “But beyond this ‘consumerisation’ of IT, which has put easy-to-use tools into more hands, overhauling a company’s internal systems and processes takes a lot of heavy lifting.”
That heavy lifting takes time and exceptionally few companies are there. Ginni Rometty, head of IBM, characterizes her clients’ applications as “Random acts of digital” and describes many of the projects as “hit and miss”. Andrew Moore, the head of AI for Google’s cloud business, describes it as “Artisanal AI”. Rometty elaborates, “They tend to start with an isolated data set or use case – like streamlining interactions with a particular group of customers. They are not tied into a company’s deeper systems, data or workflow, limiting their impact.”
While the HBR case of the MD Anderson Cancer Center provides a good example of a moonshot AI project that probably overreached, it also provides an excellent indication of the types of work that AI can materially improve. At the same time the center was trying to apply AI to cancer treatment, its “IT group was experimenting with using cognitive technologies to do much less ambitious jobs, such as making hotel and restaurant recommendations for patients’ families, determining which patients needed help paying bills, and addressing staff IT problems.”
In this endeavor, the center had much better experiences: “The new systems have contributed to increased patient satisfaction, improved financial performance, and a decline in time spent on tedious data entry by the hospital’s care managers.” Such mundane functions may not exactly be Terminator stuff but are still important.
Leveraging AI for the purposes of augmenting human labor collaborating with humans was also the focus of an HBRpiece by H. James Wilson and Paul R. Daugherty [here]. They point out, “Certainly, many companies have used AI to automate processes, but those that deploy it mainly to displace employees will see only short-term productivity gains. In our research involving 1,500 companies, we found that firms achieve the most significant performance improvements when humans and machines work together … Through such collaborative intelligence, humans and AI actively enhance each other’s complementary strengths: the leadership, teamwork, creativity, and social skills of the former, and the speed, scalability, and quantitative capabilities of the latter.”
Wilson and Daugherty elaborate, “To take full advantage of this collaboration, companies must understand how humans can most effectively augment machines, how machines can enhance what humans do best, and how to redesign business processes to support the partnership.” This takes a lot of work that is well beyond just dumping an AI system into a pre-existing work environment.
The insights from leading AI researchers combined with the realities of real-world applications provide some useful implications. One is that AI is a double-edged sword: The hype can cause distraction and misallocation, but the capabilities are too important to ignore.
Ben Hunt discusses the roles of intellectual property (IP) and AI in regard to the investment business [here], but his comments are widely relevant to other businesses. He notes,
“The usefulness of IP in preserving pricing power is much less a function of the better mousetrap that the IP helps you build, and much more a function of how neatly the IP fits within the dominant zeitgeist in your industry.
He goes on to explain that the “WHY” of your IP must “fit the expectations that your customers have for how IP works” in order to protect your product. He continues, “If you don’t fit the zeitgeist, no one will believe that your castle walls exist. Even if they do.” In the investment business (and plenty of others), “NO ONE thinks of human brains as defensible IP any longer. No one.” In other words, if you aren’t employing AI, you won’t get pricing power, regardless of the actual results.
This hints at an even bigger problem with AI: Too many people are simply not ready for it.
Daniela Rus, Director of the Computer science and artificial intelligence laboratory (CSAIL) at MIT, said, “I want to be a technology optimist. I want to say that I see technology as something that has the huge potential to unite people rather than divide people, and to empower people rather than estrange people. In order to get there, though, we have to advance science and engineering to make technology more capable and more deployable.” She added, “We need to revisit how we educate people to ensure that everyone has the tools and the skills to take advantage of technology.”
Yann Lecun added, “We’re not going to have widely disseminated AI technology unless a significant proportion of the population is trained to actually take advantage of it”.
Cynthia Breazeal echoed, “In an increasingly AI-powered society, we need an AI-literate society.”
These are not hollow statements either; there is a vast array of free learning materials for AI available online to encourage participation in the field.
If society does not catch up to the AI reality, there will be consequences.
Brezeal notes, “People’s fears about AI can be manipulated because they don’t understand it.”
Lecun points out, “There is a concentration of power. Currently, AI research is very public and open, but it’s widely deployed by a relatively small number of companies at the moment. It’s going to take a while before it’s used by a wider swath of the economy and that’s a redistribution of the cards of power.”
Hinton highlights another consequence, “The problem is in the social systems, and whether we’re going to have a social system that shares fairly … That’s nothing to do with technology.”
In many ways, then, AI provides a wakeup call. Because of AI’s unique interrelationship with humankind, AI tends to bring out its best and the worst elements. Certainly, terrific progress is being made on the technology side which promises to provide ever-more powerful tools to solve difficult problems. However, those promises are also constrained by the capacity of people, and society as a whole, to embrace AI tools and deploy them in effective ways.
Recent evidence suggests we have our work cut out for us in preparing for an AI-enhanced society. In one case reported by the FT [here], UBS created “recommendation algorithms” (such as those used by Netflix for movies) in order to suggest trades for its clients. While the technology certainly exists, it strains credibility to understand how this application is even remotely useful for society.
In another case, Richard Waters reminds us, “It Is almost a decade, for instance, since Google rocked the auto world with its first prototype of a self-driving car.” He continues [here]: “The first wave of driverless car technology is nearly ready to hit the mainstream — but some carmakers and tech companies no longer seem so eager to make the leap.” In short, they are getting pushback because current technology is at “a level of autonomy that scares the carmakers — but it also scares lawmakers and regulators.”
In sum, whether you are an investor, business person, employee, or consumer, AI has the potential to make things a lot better – and a lot worse. In order to make the most of the opportunity, an active effort focusing on education is a great place to start. If AI’s promises are to be realized it will also take a lot of effort to establish system infrastructures and to map complementary strengths. In other words, it’s best to think of AI as a long journey rather than a short-term destination.
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