ATMs and Other Machines are Exempt from ObamaCare
On June 10, Catherine Rampell at the New York Times presented what she thought was a seemingly inexplicable and troubling conundrum, which this column will clear up:
Spending on equipment and software has risen 25.6 percent in the last seven quarters, while companies’ aggregate spending on employees has risen only 2.2 percent.
Somehow, capital spending is growing faster and labor spending is growing more slowly than has been the case in almost every previous recovery on record.
A few days later, in an interview with President Barack Obama which has become infamous for his out-of-touch reference to how ATMs are replacing bank tellers — as if that’s something new — NBC’s Ann Curry opportunistically jumped on Rampell’s report to take a shot at America’s private sector:
Curry: You’re here encouraging private sector hiring. This just after the New York Times this past Friday reported that businesses have spent just 2% more on hiring people while at the same time spending 26% more on equipment. So why, at a time when Corporate America is enjoying record profits, have you been unable to convince business to hire more people, Mr. President?
Obama: I don’t think it’s a matter of me being unable to convince them to hire more people, because they’re making decisions based on what will be good for their companies.
The statist subtext of Curry’s words was offensive enough. Her venom is even more apparent if one looks at the interview segment’s video. What she really seemed to want to ask was: “Darn it, why aren’t these companies doing what they’re supposed to do? Don’t they know it’s their duty to follow your wishes, Mr. President?”
In Curry’s world, companies apparently have an obligation to spend their “record profits” (itself a questionable contention; corporate income tax collections of $85 billion through May of fiscal 2011 are less than half of what they were through May 2008) on hiring people, even when doing so doesn’t make sense. If it did, Ann, they’d be doing it. Worse, she seems to believe that El Presidente should be able to “convince” companies to add people even if doing so costs more than the newbies will contribute. It’s as if she’s begging Obama to use the bully pulpit — and to go further, if necessary — to “persuade” and if necessary force employers to take on people they don’t need or want.
Obama’s initial answer to Ms. “Command and Control” Curry was uncharacteristically good. Of course businesses have to look out for “what will be good for their companies.” Obama’s statement just before his awful ATM cite was also correct:
There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.
Ah, but what are these “structural issues,” Mr. Obama? What is so fundamentally different about this attempted recovery compared to “almost every previous recovery on record”?
At the Times, Ms. Rampell only nibbled around the edges, citing “rising benefits costs and, in particular, rising health insurance costs.” But employee benefits have been increasing much faster than wages and salaries almost continuously since World War II. Why would they have a disproportionately negative effect this time around?
On Tuesday, Douglas French at the Christian Science Monitor, commenting on Rampell’s work, blamed the 2007-2009 hikes in the minimum wage. There is no doubt that an artificially high minimum wage is harmful to job-seeking teens and low-skilled workers. But in real terms, the current minimum is about 25% lower than it was at its peak in 1968. So in theory and in ordinary circumstances, perhaps those who thought that the job market might be able to absorb such large increases without hurting employment too badly had some basis for that belief.
Shall we have a big “of course?” All this would be pellucid to anyone who hadn’t placed his socialist ideology above the objective facts. Of course, that lets Barack Hussein Obama and his lieutenants out from the start.
A great many Americans continue to insist that Obama cannot be an enemy of the United States, that he must be well-meaning but misguided. The evidence against this proposition is near to conclusive. So we must now ask: Whose supposed case of wishful thinking is more credible, that of Barack Hussein Obama, or that of the voters who, indecently eager to refute fifty years’ accusations of “racism,” installed him in the Oval Office?
The answer will arrive in November 2012.
The point Obama and the people at NBC usually miss is that, unlike the Federal Government, corporations need to make a profit in order to stay in business. The Federal Government can keep losing money for years and still keep going. All it has to do is raise taxes to get the increased money it needs. But in a corporation, you lose money, then you can’t pay your expenses, and then you go out of business. Simple, right? But not to socialists like Obama and far-left reporters in the main stream media. That’s why Obama WANTS to grow the size of government. It’s a guaranteed job WITH benefits and with little chance of being fired (unless the economy totally tanks, as it is now, and even government jobs, especially at the state level, are dropping like flies).
So corporations are doing what they need to do to stay alive. But notice you don’t hear about people losing their jobs at GM, even though their sales are down. Why? Well all that government money (i.e., subsidies) is doing wonders keeping that money-losing company afloat. And even when GM posts “gains,” all that means that it’s giving money back to the government with one hand, while accepting more help from the government with the other hand. Problem is, SOMEBODY has to pay for this socialist state and there simply are not enough “rich” people to cover the massive cost. So the money will come from YOU eventually, that is of course until the money really does run out, as it’s doing right now in places like Greece, Portugal, and Spain. So it’s great living in Obamaworld. Until, of course, the money runs out, as it’s doing right now.
Evidently the NewsDitz doesn’t grasp the difference of profits and CAPITAL (accumulated former profits).
Typical Mushroom Media type: big mouth, small mental capacity.
Dear Miss Curry,
Businesses today already employ millions of people as a result of government. They work in the tax and compliance (regulatory) organizations of most companies. These employees do nothing to add to the profitability of a company, they exist to make sure a company is following the ever changing tax and regulatory landscape. Tax or regulatory violations can cost a company millions of dollars. If the tax code were sane and the regulatory burden reasonable then companies could invest in people that actually add to profits rather than merely protect a company’s backside from government.
And how many employees would H&R Block, among others, have if not for our ridiculous tax code? No miss Curry, the government is already in the business of forcing the creation of non-productive jobs. Enough is enough.
ATMs are taking our JERBS!
Didn’t the country’s businesses also get the benefit of a tax write-off / longer depreciation / shorter depreciation / something to encourage capital expenditures recently? Seems like that was part of extending the current tax structure.
The author is correct, 99% of the businesses in the US are sitting on the sidelines waiting to hear from the Supreme Court and the 2012 ballot boxes.
A temporary convoluted accounting gimmick isn’t going to get it done. The U.S. effectively has the highest corporate tax rates in the world – over 40% in many states. Add in the payroll tax – a government fine for having employees – and I wonder that anyone gets hired.
In the company I work for, we have been buying equipment – just to replace the old and broken ones. However, hiring has been low because our profits are low.
Hiring is not low at your company, because profits are low. Hiring is low, because opportunities are low.
Businesses have trillions in capital sitting on the sideline, because they really have nowhere to invest it. They cannot make the numbers work. They cannot see their way to a profit. Plus, they do not know what this administration will do next to pull the rug out from under them.
So, they are going Galt. They are waiting until Obama is out of office. That can be in 2 years or 6 years. Take your pick.
I ALMOST PUKED IN MY MARTINI READING THIS DUMB ARTICLE! You neocons have hit a new low with this one. Oh yes, Obama is responsible for the rise of the machines! What is this, the beginning of The Terminator? Oh, and I guess Sarah Palin is your John Conner. What a bunch of maroons! You know why the criminal banks are raping the working woman of her hard earned money? Because of eight years of horrific Bush banking policy! Bush was in bed with the banks, especially the IMF, which I’m sure he used as his own personal piggy bank to fund his aquisition of the Texas Rangers. Dummies!
Folks, lest you be taken in by this poster’s comments, she/he is a master of lib mimicry. I don’t know if LovelyEarth is a “maroon” who wants to sidetrack these comments or is a conservative who enjoys riling up other conservatives, but hats off to your wit, LovelyEarth.
Mimicking the wit of a progressive is like conjuring up malaprops. It seems simple until you give it a try.
I especially love the logic of ” well Bush did x,y and z!”. Yeah….and a good defense for a thief is that other people have stolen stuff in the past.
Hi LovelyEarth! It’s you! We got you out of the closest in another thread a day or two ago; you are a comic, giving us all the basic answers of the stereotypic leftist sophist.
The Bush meme is a bit tired though. I liked your advocacy of body painting for the poor (which you provided for us on another thread) better; more original. Kind of like advocating graffiti and paying the out-of-state summer ‘homeless’ to do that.
Keep it up but I suggest more of the ‘new’ leftist memes would kick up your ratings here. You’ve done organic food, and Bush, and no cars and the poor and women. Come on – there are more things dear to the heart of the left!
I work for a reseller in the IT Space. We are seeing a lot of spending on data center and desktop virtualization, Storage, and software that makes regulatory compliance easier. Business was dead in 2009, woke up last year, and has now taken off. However, margins are a challenge. because many competitors went bust, those that survived and adjusted are now growing.
Reasons for investment are as follows: Companies could only put off refreshes for so long. They are now leveraging the money they would have needed for the refreshes to go beyond that. Desktop and server virtualization mean increased CapEx in order to reduce long-term OpEx; namely heat, power, cooling and data center space. Furthermore, companies are investing in email archiving tools (for instance, to respond to email discovery in hours instead of weeks), and management tools to allow IT staff to do more with the same or reduced headcount.
All this points to exactly what the article says – more CapEx, lower OpEx, fewer workers.
I like the article. It reminded me of the way autoworkers unions have given the development and utilization of manufacturing robotics such a leg-up.
Nobody wants to lose their job to a machine – but nobody wants to be involved in an industrial accident either, or get stuck with the responsibility for honoring wildly unrealistic retirement benefits, at the cost of watching your business decline and begin to go under.
Sooner or later, if it’s mass-produced, it will be machine produced. This is a feature, not a deficit but yes, it will require some shifts in how we keep ourselves occupied.
The lefties, the workers friends are empowering a surge of development and utilization that will bring that day to us sooner, rather than later.
For good or ill, they deserve some credit for acting as the catalyst here.
Who wants a job that a machine could do? If you are doing repetitive work that machine could perform, you expect a decent salary, job security and a pension?
The problem is that the machines are not just doing simple, repetitive jobs any more. Expert Systems and Artificial Intelligence are looking at ways to do the harder jobs too and even jobs that require judgements previously exercised only by humans. What happens when THOSE jobs get automated too? Will that be a feature too?
If those kinds of tools are cheaper overall than humans, rational business people will use them in preference to people. Sooner that we’d like to think, most of us will be out of work. What will we do then? How will we earn our daily bread?
Our current system was designed for a world where most of the people work full time and the rest – those too young, too old, or too ill to work – get helped out by those who are working. Basically, those who don’t work for whatever reason, pick the pockets (via taxes) of those who do work. But what if no one is working? Whose pockets get picked to keep the non-working people in food, housing, clothes, etc.?
People’s jobs being taken over by machines is a good thing, because it frees up labor capital to work on other things.
Put it this way: there was no way the car could have been invented a thousand years ago, because all available human capital was spent on industries like agriculture.
When the Industrial Revolution came around, farmers didn’t need to plant by hand anymore, and could use machines. Instead of having hundreds of thousands of ex-farmer’s hands go hungry, these people started to work in factories. The economy expanded.
When the modern jet airplane was developed, it became possible to bring hundreds of people across the oceans with just a handful of people. Did all of the people working cruise ships go hungry? No…
Progress begets more progress. As long as it is affordable for people to retrain in new professions, people will be able to find new work. In the meantime, the development of more and more complicated tools introduces greater efficiency into the economy which makes for a higher standard of living for everyone, as everyone’s economic output collectively increases.
I appreciate PJ Media pointing out the Obamacare issue to explain one of the key reasons that companies are not adding new employees. This has been missing from virtually all mainstream media reports as well as most new media stories, despite the fact that it and overall regulatory creep are major disincentives.
But more importantly, the media should be fact-checking Obama’s inference that ATMs have resulted in a decline in bank teller jobs. This is not true, as noted in a 2004 Fast Company magazine article:
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At the dawn of the self-service banking age in 1985, for example, the United States had 60,000 automated teller machines and 485,000 bank tellers. In 2002, the United States had 352,000 ATMs—and 527,000 bank tellers. ATMs notwithstanding, banks do a lot more than they used to and have a lot more branches than they used to.
___________________________________________
Not only have bank teller jobs increased by nearly 10%, but ATMs have created a whole new industry that has created thousands, if not hundreds of thousands, of new jobs.
As someone elsewhere noted, if Obama really believe the shallow nonsense that regularly tumbles forth from his 24/7 piehole, he’d be reading his propaganda from man-held cue cards.
Exactly. Again, the liberal malady is an inability to take a rigorous approach to whole dynamic systems. Obama saw only ATMs and Tellers, not people servicing ATMs, overall growth of industry, or people that would be tellers moving instead into ultimately more beneficial fields.
As I just heard Brian Kilmeade say on Fox, blaming employers for causing unemployment by using ATMs is like blaming light bulb manufacturers for putting candle makers out of business.
And they call themselves progressives.
P.S. regarding “And they call themselves progressives.”
They will “progress” us right back (i.e. REgress us) to the time when Man controlled Man with clubs. Ayn Rand all over again. As Ragnar Danneskjold said, “They think that Might makes Right. Let them see what Might combined with Right can do.”
Interesting that we are called “the Right.”
The many workers at the light bulb factory will be glad of the booming industry, and any unemployed candle maker worth a damn can get off his arse and learn to make light bulbs. (Candle makers not worth a damn can tighten their belts, or mooch on Welfare in this “mean” country, the first nation in history where the poor and/or shiftless are fat).
Ann Curry is the result of the years of bashing the rich. The money is unlimited. The rich are hoarding it all. I can’t be out of money, because I still have checks left. These people have no idea how money or anything else works. They think companies exist to provide jobs.
When you lay a bowl of milk before your cat, he never considers the “miracle” you have performed. He has no idea of the processes necessary to do this “simple” thing. (Likely, neither does the person doing the task.) The cat just takes it for granted. Indeed, he considers it his due. He is entitled.
Most people are like this. They have no idea how things get done. There is no cause-and-effect for them. Wealth all comes ex nihilo. Mana from Heaven. Something for nothing.
A thief, as vile and self-serving as he is, knows better. He may be immoral, but he understands there is a price to things. These liberals like Curry are lower than thieves. They have the same easy money mentality, but are completely clueless.
Truly, they are like beasts in the fields. They graze the pastures, unaware they are destined for slaughter.
In the 50s the Today Show used to have a chimp; they got rid of him because he couldn’t bake pies and act like an affirmative action/diversity robot like Curry whose single greatest “journalistic” instinct is political correctness.
Politicians go on the show because some old women vote.
The crux of the whole money thing is it’s the little money that sits on the side lines and waits. Small businesses and owners usually don’t have the resources to take a chance and this socialist bozo and his administration are a chance, a big chance. I know, I’m one of them, at this stage of the game it’s time for a holiday not investing.
Another telling example among too many to count, of how progressives just dont get it. The basic principles of sound economic practice are pretty simple and strait forward because they are extrapolations from our day to day experience. Why dont they?
It used to puzzle me why anyone would subscribe to a theory that in practice has a perfect record of failure. I used to think I could talk sense to them and surely they would see the light, but they never have. They treat every socialist failure as an anomaly even though there are no records of success. They engage in vague talk about nebulous ideals. When I give them a very simple explanation of the concept of added value or of what money actually is they give blank stares. The sad truth is that they are cognitively impaired. ATM’s are one of the causes of our weak economy….really? That is the kind of reasoning I would expect from a 5th grader.
Mr. Obama’s supporters believe him to be highly intelligent, yet all the evidence I have seen says otherwise. Are these the same people who think a guy in a lab coat must be really smart? You all keep pointing out the flaws in their reasoning, but you are wasting your breath. They are not going to get it.
I know…the summation of my ranting is ‘Progressives er stoopid!’.
I own a small business.
We are not hiring. Not even considering it.
We are shifting to the cloud. We are using web based tools and services. Independent contractors. Part time workers.
I will NOT hire at all while this President and his allies are in power. Most of my friends who run and own businesses feel and are acting the same way.
There are strong incentives now for people to not work and get on the dole . . . who am I to fight the tide?
Obama betrays his fascist (and I use the term precisely) tendencies. He believes that the purpose of businesses is to employ people. Not to make products, or to make profits for the founders – to employ workers, preferably union workers.
Obama should mandate that all machines used in business be covered by extended warranties. Ha ha that should level the playing field between man and machine.
Unskilled labor is relatively cheap compared to skilled labor. Investing in machinery is expensive compared to investing in simple hand tools. That being the case, why do construction companies employ backhoe operators and use backhoes for digging jobs instead of hiring manual labor for their digging needs? Simple – one skilled backhoe operator can do the work of at least a couple dozen ditch diggers in the same amount of time and do the job for considerably less cost.
A so-called progressive might think that a good way to create construction jobs would be to outlaw heavy machinery like backhoes. In this as in so many other things, they’d be foolish to say so. The cost of labor is far higher than the hourly wage. You have to add payroll taxes (SS and Medicare), unemployment insurance, workman’s compensation insurance, and other expenses to get the true cost of labor. Good machines aren’t cheap (but they’re a lot cheaper than they were 10 years ago) but good labor is damned expensive.
A so-called progressive might think that a good way to create construction jobs would be to outlaw heavy machinery like backhoes. In this as in so many other things, they’d be foolish to say so. The cost of labor is far higher than the hourly wage. You have to add payroll taxes (SS and Medicare), unemployment insurance, workman’s compensation insurance, and other expenses to get the true cost of labor.
A real progressive would outlaw heavy machinery and simply order people to do the manual labour. That’s how Mao did things. I’ve seen documentary footage of peasants building roads and massive dams with just picks and shovels during Mao’s regime; there were no backhoes or other heavy equipment in any frame of that film. I don’t know if these workers even received a salary; I’d be astonished if they received health benefits or unemployment insurance. I doubt they were even free to decline this work on pain of being denied food or even being shot.
Stalin used similar methods. His minions would arrest people for nothing and then torture them until they confessed to some outrageous (and completely fictitious) plot, then either execute them or send them off to the gulag for a period of years. Those in the gulag were set to work on massive projects. (Solzhenitsyn said that only about 1 in 7 of the people sent to the gulag survived their sentences.) Solzhenitsyn describes one such project where Stalin decreed an urgent need to build a canal of considerable length. Prisoners in the gulag were put on the job with only picks and shovels and the occasional horse. (When horses weren’t available, they would have men stand in for them.) A quarter million men died during the construction of that one canal alone. (The canal ended up being too shallow for anything but the smallest craft and was therefore useless for its intended purpose.) There were many more such projects so you can rest assured that millions more people died working on them.
Just wait until Obama and his czars remember those details of their glorious progressive history and decide to try the same thing in America….
Ann Curry’s attitude…just ORDER IT UP, Mr. President…is typical of how Progressives like Ann and Bill Maher see the role of the Executive, i.e., the peeps are too dumb and corporations too greedy, so you, BHO, are just gonna have to correct all these greedy morons by executive fiat.(while you’re at it, just order up proper tire inflation and the “energy crisis” will go away, as you said during your campaign)
Much to Progressives’ collective chagrin, however, even Barry hasn’t (yet) degraded the country enough to order companies to ignore their own bottom line and succumb to the liberal wet dream of how to run their businesses.
In the Progressive spirit of Words=Truth, new DNC chair and blabbermouth DWS…
Assures you that All is Well
I think ATMs are a racist sexist plot by racist sexist capitalists to avoid social justice for the races and women. More cheap exploiting ATMs, no peace.
If ATMs are taking all the teller jobs, then why are there so many banks in grocery stores with tellers?
A simple, but under-reported, part of the problem is the artificially low interest rates we have had for +25 years. At 2-3% interest (now available for corporate bonds)you buy things. At 6-7% interest you hire people.
Artificially low rates also punish savers and encourage speculation in search of yield.
We will have a moribund economy for years to come (see Japan) if we don’t let interest rates normalize. We will hurt for a while, but the adult thing to do is get on with it knowing that better days would soon arrive. I don’t see better days on the horizon now any time soon.
Let’s replace the current POTUS with an “APM” or, “Automatic Presidential Machine.”
Here’s how it works: Enter your PIN, your address, your income, the number of children you have, the type of vehicle you drive and it will either: foreclose on your home, raise your taxes, take at least one of your children, fine you because you’re not “green” enough, or refer you to a nearby shrink, who will help you because you elected a Democrat POTUS!
That was very funny.
Is there Affirmative Action for machines and software yet?
Maybe force employers to use faulty machines that don’t work right or are not needed and can’t be repaired and buggy software that is useless just to make things ‘fair’.
I kid. I kid.
And Delia, don’t forget letting the machines unionize. Working in the extreme hot & cold, no breaks, no free coffee, no paid vacation(s), no sick days, no health care insurance, no pension – all brutal conditions for those poor machines!
The BORG has feelings toooooooooo!
Feelings…nothing more than feelings…
“Hey, who put that bolt in my socket?”
Next up…
Teaching male machines to understand when female machines say “NO means NO”… translated as: “101010>:( 10101010″
Then, the machines that breed viruses who want welfare checks to keep up their viral breeding and refuse anti-virus software and get sick all of the time and refuse a cure but keep running to Microsoft for a fix…
PANDEMIC of the MACHINES!
Jeebus. Sorry, folks. That was my worst attempt ever. I’m rusty.
Hey, don’t give Obama and his Socialist buddies any ideas …
Great article!
Also, a primary purpose of ATMs is to do banking after hours. Are there any banks that offer 24-hour teller service? Are there any that would do so, if ATMs didn’t exist? Probably not…
I like a reference in an earlier comment to Mao. He tried to employ millions of ordinary people in the steel industry during the Great Leap Forward. They melted their own farming tools into useless metal bricks. The result was massive famine.
The funniest thing is that Obama depends on the Silicon Valley techies for campaign cash–true cognitive dissonance on both ends of that transaction.
Considering the unprecedented economic control this administration has, and its cronyism and dealing of special favors, perhaps Curry wants Obama to do more than use the bully pulpit. Perhaps she wants him to say, play ball on hiring new people, and you get the special goodies and subsidies, dont play ball, and we drive you out of business.
I’ve never been self-employed, but I’ve run plenty of businesses for other people and I can state unequivocally that of the many administrative and operational pains in the ass connected with running a company, personnel and labor matters are hands down the biggest.
Yes, employees are expensive, but that in itself is not the problem. It’s all the rules and regulations foisted on the employer by unions and government organizations like OSHA and the EEOC. It’s the endless mandates that come from Congress and state legislatures. It’s having to be tax collectors and government statisticians. It’s the legal exposure (it got to the point that the only people I wanted to hire were young-to-middle-aged, white, heterosexual, non-gender confused, atheist men because they’re the only people who have no legal standing for discrimination suits). And, of course, it’s having to deal with the human factor. Gad. Small wonder companies want to automate to the extent possible or relocate to venues where they can pretty much do as they wish with their employees.
If companies are sufficiently profitable with their current staffing levels, why should they be looking to hire more people? If they can turn over jobs currently being performed by humans to machines, why shouldn’t they do it? What does the amount of corporate cash currently sitting in reserve have to so with personnel decisions? You hire more people only when you can’t meet the demand for your service or product with current staff. We consumers just don’t have the economic comfort level to make the kinds of demands we have in the past. When we have more confidence in our economic futures, that no doubt will change.
That is why I closed my consulting business. I was up to my neck in paperwork and I had to grow it almost to double the size to be able to hire one or two people that could take care of the administration. In the end, being an employee started to appeal to me and when the offer came I did not hesitate.
If Government is so smart and just, if they know how to protect employees from that mix of Scrooges and Legrees that all capitalist employers are… then DO IT YOURSELVES, TAX YOURSELVES smartypants. They are no going to hang me from a lamppost when the masses have enough of hunger and oppression.
This is typical of the leftist mentality on the web. They can’t understand why businesses, after being taxed, regulated and berated to death don’t just pony up a bunch of money and rescue the president’s agenda. They are actually pissed that the folks they hate aren’t bailing their guy out.
And I always thought this lean-brain-management (let the client do the work) does actually come from the states… I guess you also should get used to it, it rampages about since quite a long time here in europe. Got so used to it, I’d refuse certain services offered to me^^
Does obama know how to use an ATM? I know obama knows how to extort money like the Mafia!
Don’t you need like, human workers to create ATMs? To program them, and fix them when they’re malfunctioning? I’m guessing banks also have to hire tech guys to manage ATMS and computuer operations.
You hear unions and other liberals also blaming outsourcing for lost American jobs. They don’t see the consumers spending more on the local economy as they save money on cheap imports. The companies that outsourced jobs can afford to keep other workers and even expand.
Ruben Naverrette Jr (I think he has some valid points) will quickly point out that illegal alien workers are not unlike ATMs. You can treat them like illegal independent contractors – cash payment under the table, no long term commitments, flexible salary. No tax, no healtcare cost.
The President does have a point in that technology does put unskilled laborers out of work, but we are better off for it because that same technology causes better jobs to arise in place of the ones that have been lost.