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Disappearing work

November 14, 2014

CBRE predicts that half of all occupations will disappear in fifteen years. There is a lot of uncertainty still about what jobs AI will demolish. Commercial drivers? Almost certainly. Alaska fishermen? I doubt it. Sex workers? David Levy thinks AI will move there fast.

Economically, that means more return to capital, and less need for workers. That divergence started three decades past. Josh Marshall argues that the Democratic Party fails by not having a solution to that. I think he is right. The GOP, on the other hand, isn’t yet ready to recognize the problem.

The 2008 financial crisis largely was the bursting of a derivatives bubble. Those bets were made on mortgages, all promises on middle class labor. One reason the quant models failed together is that they did not account how that new class of derivatives was driving the real estate market, rather than merely betting on it. An interesting question is whether they were also yoked, because they failed to reflect how the continued divergence of wages and productivity would affect real estate markets? (This 2011 article by Barry Ritholtz eviscerates some politically popular explanations of the crisis.)

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