Donald Trump – STIMS Institute

The Men of America

Triangle of Skills

The article titled Election 2016: The men America has left behind, in the CNN – Election 2016: Your money, your vote section is misleading on many ways.

In the first place, America did not leave behind any one. America as a nation is made up of people, who work in the country and get paid for AND the business men who run the companies and employ these workers. So, the article should be titled: The men that American businesses have left behind.

America is not a socialistic or communist country where everyone gets taken care of by “America” (i.e.) the US government and hence the POTUS and the US Congress. It is a Democracy – of the people, by the people and for the people. Hence the more appropriate title may be: The men of America who let themselves to be left behind. These American men were happy to be paid good wages as long as they had a job where they could use their physical labor in the factory floor. This is very well illustrated in the GE commercial: https://www.youtube.com/watch?v=3xGoBlI_fdg These skills – the muscle power – has always been available everywhere across the globe. Being born or living in the US does not guarantee the use or need for these skills. These men always used their brawn, but never used their innate skills to think and analyze what is happening around them. They let business men like Donald Trump take their jobs across the globe. Now they are being conned by the same business leader to think that it is everybody else’s fault, except theirs. The focus is on men only because there were more men than women using their brawn in our factory floors. But, the issues and being conned are the same for the women as well as the men of America. Also these men were idle or willing to let the state governments weaken the unions and their bargaining power, while the crony capitalism was also growing. Democracy does not succeed if the voters do not exercise their vote or uneducated on policies that affect them or swayed by cable news and radio talk shows and reality TV.

The title could also be The Men of America left behind by “Technology”. It is sad but true that everyone has been conned to accept that the word “Technology” stands for Digital Technology or IT. This technology is useful to take the power of information away from many people into the hands of a few. This has dramatically reduced the number of white collar jobs. This impact has been largest in the US first, but it is sweeping its impact across the globe. With the automation of information the men of muscle power could also be replaced by lower cost labor from Mexico, China, … all padding the pockets of business men like Donald Trump, with more profit. I

The title could also be The Men of America left behind by intellectuals and policy makers across the globe. The word Technology stands for integrated use of Science, Engineering and Managnment in any discipline. While America continues to make progress in a few other technology areas besides IT, the time and investments needed in many more technologies – for alternative fuels, clean air and water, controlling the global warming, space exploration, under water exploration, eradicating hunger, thirst and poverty across the globe, peace through prosperity in Middle East, …. – is far less than the jobs being taken away by the relentless use of IT in the current work place.

The title could also be The Men of America being misled by Donald Trump. No matter how much Mr. Trump promises, he cannot make America great again, by forcing US businesses to “make” things in America. It is only a matter of time that some manufacturing jobs will be returning to US due to natural economic forces (with or without Mr. Trump). But, they will not be for these men of muscle power. They will be for the few who with skills to work in an automated factory floor with robots and AGVs and networked machines and systems.

The title could also be The Men of America lured by cheap products at Walmart. While the US business men were attracted and even addicted to low cost labor, the US population has been equally attracted to lower cost items – made in China – available in places like Walmart. No one gets anything for nothing. Lower cost products at Walmart also mean lower cost labor from China and Mexico and lower cost of white collar labor every where.

May be the title can also be The Men of America who think college education is their savior. This is the myth propagated by the media and fueled by free college for all by Mr. Bernie Sanders. College education, even if it is free may not be the answer for a large majority of American workers. Yes, it is a definite pathway but only for a few.

May be the tile could be Men of America who are not learning some skills – to be a solution provider – for locally accessible jobs. Following quote from the same CNN Money article is relevant here:

Meanwhile, unlike some of his fellow factory workers, Cavins is determined to get a good job. He’s betting that a yearlong course in industrial maintenance will give him the skills needed to work in heating and cooling services, which his online searches found can start at $40,000 a year. He’s willing to leave Scioto County and work anywhere … in a hospital, factory, school or water supply facility, for instance. One day, he’d like to start his own business. …… The program, offered at Scioto County Career Technical Center, costs nearly $10,000 and has placed 95% of its graduates over the past two years in jobs that typically earn between $31,000 and $40,000 annually. To finance it, Cavins received a federal Pell Grant for $5,900 and took out two loans. …. “I didn’t think I’d get anywhere without learning a trade,” said Cavins, who graduates in September. “I want to give my family better than what I had. I want to try to break the cycle and not live on disability.”

May be the title could be: Men of America that the country and US policies left behind, due to crony capitalism, Republican obstruction in the Congress for infra-structure investment and false hope on higher education at the expense of free or affordable training for employable skills development. Perhaps for the time left before the November election, the presidential candidates can propose and develop support for such training. Community Colleges in collaboration with local companies and employers can offer such training. The companies who collaborate on such training can be given tax subsidies as their incentive? Free community college education proposed by the POTUS can be for such targeted training and not for open ended education?

For more details on how these men – working middle class – were left behind, please read: The System Approach – A strategy to survive and succeed in the global economy ;

Thriving in the 21st Century Economy – Transformational skills for technical professionals.

You are not afraid of change – but for what pupose?

One thing that can be said for certain about the American public is that they are not afraid of change; if that suits their short term economic self-interest so much the better, even at the expense of the long term impact. This sub-text would appear to be often missed in the analysis when looking at the current appeal of the Donald Trump campaign.

The traditional belief was that the Americans loved big U.S. made cars even if they were gas guzzlers. This resulted in U.S. automakers expecting their customers to buy a new car every three to five years. “Planned obsolescence” was part of their strategy, without regard to its long term consequences.

The US customers were eager and ready to switch to smaller Japanese cars when such cars offered better fuel economy, higher reliability and lower cost. The loss of jobs for US auto workers was never a concern that stopped them from flocking to the Japanese auto dealers and later to other lower priced imports.

The traditional belief was that America was the manufacturing capital of the world. The products made in China and elsewhere were considered cheap but of poor quality. Yet, when companies like Walmart could import Chinese made products at lower price, the impact of which can be readily seen in any one’s pocket book, the switch was imminent and seamless. Never mind the loss of millions of jobs and the economic and wage stagnation for many.

Any one working in import/export business knows full well the difficulties in selling into Japan, and China than it is to import from these countries. Such trade may not be open and free as assailed by Mr. Trump. But the unfair trade has been embraced and not rejected by the US business community for their short term gains. It is disingenuous now for this business leader to blame the foreign governments without himself looking at the mirror and asking his fellow business leaders to do the same.

The lure of cheap labor and tax incentives and tax free infrastructure investments from China and other countries were sufficient for thousands of investors and their CEOs to switch their US production to these countries. The favorable impact on their short term profits and balance sheet was adequate for such switch. Never mind the hollowing out of the middle of every kind in the US economy.

Converting all fixed costs into variable cost was seen as a business strategy, promoted by business consultants, never mind the impact on loss of skills and capabilities required for long term sustainability of their client companies.

US consumers were not averse to sub-prime home mortgage loans, never mind their long term inability to pay for such loans.

We see the same emphasis on the short term economic self-interest at work in many other facets. US Congress is stagnating because the representatives in the Congress place greater emphasis on their re-election and primary fights than advancing national policies and programs. Wall Street may be greedy, but behind the Wall Street are men and women with greater emphasis on short term needs never mind their long term impact.

Apple claims to be fighting for the protection of first amendment rights, but one can wonder how much of this resistance has to do with protecting their current overseas sales?

Income from their overseas operations is parked by many companies outside the country because they don’t want to pay the current US taxes.

It may be the short term self-interest that drives Mr. Trump in his quest for Presidency as well as his supporters to the polls. The same short term self-interest may keep the Republican candidates against coalescing around a consensus anti-Trump candidate for the long term benefit of the Republican Party.

Let us be clear about one thing: It may be only a minority of the US population that is so focused on short term self-interest. But Democracy is a system of Government where the majority protects the interests of the minority.

Perhaps the current discussion in the presidential primaries should be expanded to include the role of the minority and their economic self-interest and how it can co-exist with the needs of the majority or the nation as a whole. Such a holistic view – system thinking – will be a welcome change that every American can embrace?

It is the reality now that being born in the US or any other developed nation by itself is not a guarantee for economic success. One would hope that many of the Trump’s supporters would see this writing on the wall. Also one who has been playing by the rules of crony capitalism can not change over night to become a populist and fighter for economic equality for all, as Donald Trump promises to be.

Yes, the US population seeks a change and ready to embrace it. But the change has to come from within each individual and their passion for success. But emphasis on the economic self-interest of every individual also requires them to focus their short term efforts on System Thinking and Transformational skills. This change which in turn will lead to their long term competitiveness and success in the global economy.

What is common between Bernie Sanders and Donald Trump?

There has been huge attendance in the recent Democratic rallies featuring the Vermont Senator Mr. Bernie Sanders. On the other hand Mr. Donald Trump has been sucking up all the oxygen and attention with his harsh language against immigrants and his fellow presidential candidates in the Republican primaries. The popular support for these candidates may be seen as the pent up anger in the population against the Wall Street and the perceived syphoning of jobs and economic opportunities by the illegal immigrants from the south of the border respectively. This kind of anecdotal explanations by the reporters and political pundits may not serve the nation well for the long term.

In a recent article published in the Washington Post titled: Sorry, but the jobless future isn’t a luddite fallacy the author makes the point: Policy makers have a big new problem to deal with: the disappearance of human jobs. Not only will there be fewer jobs for people doing manual work, the jobs of knowledge workers will also be replaced by computers. Almost every industry and profession will be impacted and this will create a new set of social problems — because most people can’t adapt to such dramatic change.

The author makes it look like it might be a problem developing into the future. But, reality suggests that the problem started a decade before Regan years, got established through the Clinton years. When the very survival of the economic order was in question due to the financial crisis along with protracted engagements in wars, when Mr. Obama took office, gradual erosion of employable opportunities for the large cross sections of the society has continued but seen merely a side issue. Now as these two national concerns are addressed to some extent, the pent up fear and anger and despair in the population is finding its voice through the emotional appeals of Mr. Sanders and Mr. Trump, even if their tones are completely different.

We have documented this erosion in the meaningful opportunities for employment and economic well being as the Binary Economy well documented in our recent book. Instead of waiting for some one else to fix the problem we have suggested that technical professionals, students and others should systematically cultivate specific skills – Transformational Skills – to enhance their job and career opportunities. These individual centered initiatives will go only so far. It requires national leaders to comprehend the evolving Binary Economy and develop policies and national consensus for coping with its impact. Merely cloaking the Digital Technology as “high tech” and glorifying the thief using DT tools as “hackers” does not do well for societies that have succeeded through the use of all sorts of technologies as the backbone for their success.

Absent such policies we see continued isolation and layering of job opportunities. This leaves people in the lower levels of jobs (largely involving physical work or information tasks) with a sense of despair that unless you are born in a well to do family and go to school in a better neighborhood, your opportunities are permanently shut off. The knowledge economy and the skill based economy have become code words for the success of a few while others stagnate. These issues may be the under currents supporting the fan base for Mr. Sanders and Mr. Trump.

Clearly the answer is not the anger and abuse against the immigrants unleashed by Mr. Trump. Raising minimum wage and such social policies for re-distribution of wealth by Mr. Sanders may be temporary fix. But they may not be the sufficient or sustainable long term answers as well. As noted in the Washington Post article: If we can develop the economic structures necessary to distribute the prosperity we are creating, most people will no longer have to work to sustain themselves. They will be free to pursue other creative endeavors. The problem, however, is that without jobs, they will not have the dignity, social engagement, and sense of fulfillment that comes from work. The life, liberty and pursuit of happiness that the constitution entitles us to won’t be through labor, it will have to be through other means. Is this the way of life we want?

What are the other means for such living, where anything a human can do – read, write, think, analyze, infer, conclude, decide and control – can all be done by computers and IT solutions? Mr. Steven Hawkins has raised this specter and fear one can envision due to irrational deployment of Artificial Intelligence in the future. But, the irrational deployment of digital technology for incremental gains in cost reduction and elimination of human employment has started at least four decades ago. This has been happening in parallel with unprecedented gains in many new areas thanks to advancements in Digital Technology. Are these two sides of the lever balanced? If not how to maintain the balance? These are the questions that have not been addressed for the past four decades.

There is also a need for discussion on another balancing act: Investors – those with capital or money – can work and use all resources across the globe and we call that as global capitalism. Yet national economic policies – of the countries in which the same investors live – are constrained by what the government can do within its shores. When human beings as employable resource migrate from rural areas of China and India to the urban centers it is considered legal. The same migration of people for the same reasons from poor countries to more affluent regions in their neighborhoods we decry them as illegal labor.

Such balancing act in several fronts are entirely new. This is an open space for any national leader from either party to develop a dialogue and national mandate for future actions. Whoever fills this void may emerge as our next President. Or we may go through another election without any consensus and more shouting and name calling. After all any social system under great stress needs to find the vent to release its anger and frustration. We see this release of frustration as the common outcome of the campaigns of Mr. Sanders and Mr. Trump at this time.

Some might say “the train has already left the station and it is too late to do anything”. Such pessimism and acceptance of systematic loss of opportunity for large segments of work force and relegate them as un-employable will only fuel the pent up anger. Then we can expect to see even larger crowds at Bernie Sanders rallies or higher poll numbers for Mr. Trump, even though neither of them may win the presidency. But it will also weaken any future president without a mandate to strike the right balance required, as mentioned above.