The New Industrial Revolution

[Parsad]

While many think the best days of the U.S. are behind them, I'm in complete disagreement.  I think the future, not only for the U.S., but the rest of the world over the next fifty years looks amazing!  As I'm getting older, I'm marvelling at what technology is doing to our planet.  I'm very much in the Charlie Munger camp, that many of our current ills will be solved by humanity's ability to adapt and advance technology.  The fruition of free market economics in countries like China, South America and many other parts of the world, will help further the process.

 

I remember when I was about 11, my father brought home the first computer-based system I had ever encountered...it was the Pong videogame, which we attached to an old black and white tv we had.  I had a blast moving these little round knobs to move the line up and down the screen, hitting this little "square" ball that was moving around.  Then over time we advanced to an Atari video game system, an Atari computer where I learned to program in BASIC, a Commodore 64, a big-ass portable PC which looked like a gigantic sewing machine case, and then finally an IBM PC XT.  Today, my little Iphone allows me to do things that the old XT could only dream about.  I run our funds from my laptop and cellphone.  Amazing!

 

And then think about science, about identifying genomes, biotechnology...nanotechnology!  It's all coming.  Our ability to harness the full capacity of our brains will make the world a better place.  Why am I talking about all of this?  Well, I remember about 6-7 years ago, Bill Gates talked about how he would like to supply the world's underpriviliged children with cheap laptops...that a $100 laptop was possible:

 

http://www.cnn.com/2010/WORLD/asiapcf/07/23/india.thirty.five.dollar.laptop/index.html?npt=NP1&hpt=Sbin

 

The best days for all of us are ahead of us...not behind!  And the U.S. is leading the charge...passing knowledge, wealth and prosperity to the rest of the world.  The era of India and China isn't the U.S.' demise...quite the contrary!  Cheers!

[Guest Bronco]

Parsad - I agree overall, but don't you feel the extension of life (thru medical advances) will cause more and more economic trouble for the U.S. government (through higher social security, medicare and other costs)?

[Parsad]

Parsad - I agree overall, but don't you feel the extension of life (thru medical advances) will cause more and more economic trouble for the U.S. government (through higher social security, medicare and other costs)?

 

I think they'll have to increase the qualification age for many social benefits.  Thirty-forty years ago, 65 year old people were physically ready for retirement at 65...that is, if they were fortunate enough to make it to that age.  We were a manufacturing country...plenty of hard labor.  Medicine, technology, industy & labor in general have changed that in America.  

 

A 65 year old today is likely to live to 85-95, especially as medical science and technology advance.  Also, how many people now operate small, home businesses...the landscape is changing.  I see no reason why maximum retirement benefits should be reached only at 75, with penalties applying for each early year you take...resulting in a minimal retirement benefit at 65.  Perhaps, we may need to modify benefits and eligibility based on years of service in a specific industry:  If your line of work is physically enduring, then your pension kicks in at 65 depending on years of service, but for people who sit at an office desk, your eligibility kicks in at 75.

 

Whether we like it or not, qualifying ages will have to change simply based on demographics...not unlike Japan.  If we're going to change them, let's make them effective.  So, if you choose skilled-labor, where we are going to have a shortage, then you have better and earlier benefits.  If you choose an office job based on higher education, where your body isn't exposed to as much abuse, then your benefits kick in later.  The end result is that people have to be partly responsible for their own well-being...whether that is your health, savings, or pension.  And the social benefits we provide should be incentive-based and reasonable.  Cheers!

[Guest Bronco]

Parsad - You're killing me.  I gotta work another 40 years?  I am already really tired.

 

Must be why God invented coffee. 

 

 

(all joking aside, they will need to change payout formula.)

[Parsad]

Don't you like working, Bronco?  If I wasn't working, what the hell would I be doing...even if I was 65?  Oh, I guess I would be responding to posts like I am!  ;D 

 

Frankly, I think working is better for your long-term health as well.  Look at Rose Blumkin or Buffett.  Cheers!

[wiessman]

Parsad,

 

I just read your initial post right after reading Howard Mark's latest commentary.  I don't know how to reconcile the two views which on surface appear to be diametrically opposed.  It seems like every dimension of life these days involves a struggle between polar opposites.  Are these merely descriptors of fat tails that will resolve themselves somewhere in the middle?