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Yet much like millennials will never have a landline, a coming generation might do without bank accounts thanks to secure, peer-to-peer cryptocurrency transactions. Blockchain technology and the vast new crypto wealth have opened the door to four cryptocurrency futures that could usher in a new financial order.

Four Cryptocurrency Future Scenarios

What are these possibilities?

  • The Federal Reserve could issue its own digital currency, as some global central banks are exploring.
  • Large companies such as Amazon, Walmart and Starbucks might issue digital coins that inspire trust and gain wide acceptance.
  • Retail giants, by accepting payments in the currency, could elevate Bitcoin, Ethereum or another cryptocurrency above the others vying to offer safety, soundness and utility.
  • Finally, if  trust is lost in government-backed, or fiat, currencies, a cryptocurrency future could come about by default. That may be a risk not only in places like Venezuela, but in the U.S., where federal deficits are spiraling.

“Virtual currencies might just give existing currencies and monetary policy a run for their money,” International Monetary Fund director Christine Lagarde predicted last fall. “Citizens may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash — no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities,” she said.

That explosive potential helps explain why so many tech entrepreneurs and investors turned cryptocurrencies into a 21st Century gold rush, even as JPMorgan Chase (JPM) CEO Jamie Dimon has trashed Bitcoin as “a fraud.”

Dimon and other titans of finance voice certainty that commercial banks will remain indispensable, cryptocurrencies will stay on the fringe, and governments will want to keep it that way.

FedCoin? Central Banks Mull Future Of Cryptocurrency

Blockchain’s potential to revolutionize the financial system has some central banks studying whether to issue their own digital currency. Yale University scholars have proposed the FedCoin. In this cryptocurrency future, FedCoin could make monetary policy more flexible and forceful, even allowing for negative interest rates.

If a cryptocurrency acted as a reliable, widely accepted store of value, people could cut ties to their banks. They could keep some crypto cash in digital wallets, with other liquid assets in mutual funds, stocks and government bonds.

A Bank of England study concluded that a central-bank cryptocurrency could boost GDP by 3%. Gains would come, in part, from shrinking “monetary transaction costs that are analogous to distortionary tax rates.”

Yet FedCoin looks far-fetched at present because of the massive disruption it could cause. Central bank crypto dollars “could endanger the economically and socially important financial intermediation function of commercial banks,” JPMorgan analysts warned.

The contribution of fractional reserve banking to global growth — turning each $1 of deposits into $10 in loans — could fade. “We would expect that central banks would think twice before disturbing this source of capital to the private sector.”

Bitcoin Crash Or Cryptocurrency Revolution?

Dimon is surely right about one thing: The cryptocurrency future will depend heavily on government. That could mean smothering it with regulation, stealing its thunder via FedCoin or cultivating it with a light regulatory touch.

Bitcoin hit its 2018 low early on Feb. 6, the morning of a key Senate cryptocurrency hearing, briefly undercutting $6,000. The chairmen of the Securities and Exchange Commission and Commodity Futures Trading Commission both urged stronger oversight. But the financial regulators stopped short of sounding an alarm. Nor did they call for any legislation to rein in cryptocurrencies. In the weeks after that hearing, Bitcoin rebounded to around $11,000 but it has retreated yet again to below $7,500.

Bitcoin had doubled in the first half of December, hitting a peak above $19,000 just as Bitcoin futures began trading on Cboe Global Markets (CBOE) and CME (CME). The anticipation of futures trading, touted as validation from U.S. regulators, stoked speculation.

At the Senate hearing, Sen. Mark Warner, D-Va., who earned his fortune as an early investor in the cell phone industry, said he sees a parallel between mobile phones then and cryptocurrencies now. “The same kind of transformation is about to take place,” he said.

Could Bitcoin Raise Systemic Risks?

Warner criticized the CFTC for embracing Bitcoin options at this stage. He fretted that total cryptocurrency market capitalization could hit $20 trillion — vs. $300 billion now — with another 2017-like surge.

“This rises potentially to the level of a systemically relevant event,” Warner said.

Yet there’s reason to doubt that cryptocurrency frenzy will return. JPMorgan Chase, Bank of America (BAC) and Citigroup (C) — Ma Bell in Warner’s analogy — banned credit-card purchases of cryptocurrencies. Meanwhile, the SEC and foreign governments have cracked down on initial coin offerings. And lately, Alphabet (GOOGL)-unit Google, Facebook (FB) and Twitter (TWTR) have banned cryptocurrency ads.

Even Ethereum founder Vitalik Buterin warned via Twitter not long ago that cryptocurrencies “could drop to near-zero at any time.” He added that “traditional assets are still your safest bet.”

The Bank for International Settlements, the central banker for global central banks, has warned that cryptocurrencies in the future could become a “threat to financial stability” if regulators aren’t vigilant. U.S. regulators appear to be playing catch-up. As of Feb. 6, the cryptocurrency working group put together by Treasury Secretary Steven Mnuchin had held a single meeting.

Politicians and central bankers worry that cryptocurrencies won’t hold value in a panic. “When things really go bad, where do Americans turn?” Philadelphia Federal Reserve President Patrick Harker asked a fintech conference last fall. “Well, they’re going to come back to the government. That’s the history of the country.”

Another ‘Large Player’ For Cryptocurrencies

Harker did allow that other currency models might work if another “large player” besides the government provided trust.

Who could fill that role? Starbucks Chairman Howard Schultz offered some thoughts on the coffee chain’s January earnings call.

“I personally believe that there is going to be one or a few legitimate, trusted digital currenciesoff of the blockchain technology,” Schultz said. He doubted that Bitcoin would be one of them.

Cryptocurrencies “will have to be legitimized by a brand in a brick-and-mortar environment, where the consumer has trust and confidence in the company that is providing the transaction.”

Starbucks wants to play a role but isn’t making a big investment in a cryptocurrency future right now, Schultz said.

Amazon, Cryptocurrency Kingmaker — Or Central Bank?

Cryptocurrency investors have speculated that Amazon might accept Bitcoin or one of its digital rivals. That specific cryptocurrency would vault past competitors as a trusted store of value and useful medium of exchange. Amazon even registered the domains AmazonEthereum.com, AmazonCryptocurrency.com and AmazonCryptocurrencies, kicking such talk into high gear.

Alternatively, Amazon, Walmart — or a consortium of large companies — might issue their own cryptocurrency. Doing so could let them save on transaction costs and act as a competitive weapon.

But Amazon has also been cozying up with JPMorgan. Recently, Amazon and JPMorgan have partnered in a health care venture and in creating a new type of bank account.

Yet imagine if Amazon or Walmart rewarded loyal customers with tokens that could escalate in value. The tokens would jump to the head of the cryptocurrency pack with potential for broad acceptance as a currency. Customers would likely hoard the tokens, rather than spend them. The effect on sales and profits might be electric.

For a digital currency to gain wide acceptance from outside businesses, the issuer would have to act like a central bank. Governing a currency requires trust, so some functions might need independence from corporate issuers.

Those milestones could ease fears of a massive cryptocurrency crash. The Fed shouldn’t need to rush in and save the day if AmazonCoin or WalmartCoin crashed.

Currencies rely on conservative and predictable rules to assure the public that massive money printing won’t destroy value. Could people trust the central bank of Amazon?

Then again, will people always be able to count on the Fed?

Cryptocurrency Future: Competition For Central Bank Fiat Money

The Fed controls the creation of money, but central bankers seem to be losing their grip. Any loss of faith in the dollar and the Fed bodes well for a cryptocurrency future as dollar-skeptics look for an alternative store of wealth — besides gold.

Bitcoin’s peer-to-peer electronic payment system, first proposed in 2008 to verify transactions through a decentralized public blockchain, arrived on the scene as the global financial crisis triggered bailouts of one big bank after another.

Bitcoin fulfilled famed economist Friedrich Hayek’s idea of denationalizing money. He believed competition could help keep central banks honest and prevent runaway inflation.

Doubts fueled by “ballooning balance sheets of the major central banks in the aftermath of the global financial crisis” motivated early cryptocurrency investors, JPMorgan analysts wrote. Yet the lack of any upsurge in inflation since “has surely reduced concerns about fiat (legal tender issued by a central bank) money.”

A Fiscal Train In Cryptocurrency Future?

Yet the Fed now faces a much different challenge: a runaway federal deficit even amid a strong U.S. economy. The deficit will top $1 trillion in fiscal 2019 and $2 trillion by 2027, and there’s no fix in sight. Republicans have overseen big deficit-financed tax cuts and increased government spending. Democrats want more generous Social Security benefits, Medicare for all and debt-free college.

“The continued growth of public debt raises eventual sustainability questions if left unchecked,” Goldman Sachs economists warned recently.

The Fed seems on track to suffer the same fate as the Bank of Japan. The BoJ has been forced to accommodate sky-high government deficits with easy money and asset purchases. Japan, with a falling working-age population, hasn’t had a whiff of inflation. But the U.S. might be a different story.

Deutsche Bank global credit strategist Jim Reid put this shocking headline on a November report: “The Start of the End of Fiat Money?” Reid argued high debt levels will keep the Fed and other central banks too accommodative, putting fiat currencies at risk.

“The fiat currency system may be seriously tested over the coming decade and ultimately we may need to find an alternative,” Reid wrote. “Cryptocurrencies are all the rage at the moment and are as much about blockchain as anything else, but there could be an increasing desire for alternative” mediums of exchange in the years to come.”

Keep in mind that fiat money is a relatively young innovation. It’s only truly been the norm since President Nixon ended the dollar’s quasi-gold standard in 1971.

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With almost 600 coal plants shut down since 2010, we are racing towards a grid reliability crisis of our own making. Millions of Americans are at risk of electricity price spikes from a loss of energy diversity.

Cheap natural gas, in conjunction with a regulatory onslaught on the coal industry, has reduced coal’s share of our electricity mix to 30 percent — down from 50 percent little more than a decade ago. The loss of coal plants, long the foundation of our electricity system, is coming at a high cost. It has already resulted in the loss oftens of thousands of jobs and hundreds of millions of dollars in revenue for state and local governments. Our growing reliance on natural gas is beginning to stress the grid even further.

Make no mistake, low-cost natural gas has been a blessing for the nation. It has helped reduce utility bills, create jobs in gas-producing states, and improve the competitiveness of our manufacturing sector. But natural gas demand continues to grow while efforts to block new gas production and new natural gas pipelinesgrow in tandem. Environmental activists waving a keep-it-in-the-ground bannerhave succeeded in influencing mainstream politics with disastrous consequences for energy policy. Massachusetts is case in point.

The Bay Statehas shuttered its coal fleet, resulting in a disproportionate reliance on natural gas to meet both its electricity and heating needs. On bitterly cold winter days mayhem has ensued. While the U.S. is now the world’s largest natural gas producer. Massachusetts, particularly the Boston area, has at times been home to the most expensive natural gas in the world this winter.

Gas demand has far exceeded the capacity of the region’s pipeline network to get it where it’s needed. Pipeline companies have tried building new capacity to meet the demand of the regions’ utilities. But environmental activists and their allies in the state legislature have blocked it.

Pipelines are now being challenged by activists in nearly every state they’re proposed. The Keystone XL obstruction model has become a playbook for extremists who clearly don’t care about grid reliability or consumer costs. Just ask Boston ratepayers.

But for those of us that do care, the current trends are deeply concerning. We should certainly fight to expand our gas infrastructure and take steps to push back against activist obstruction. But we would also be wise to preserve our existing coal fleet.

Congress can do its part by approving a measure that would provide a 30 percent tax credit for operating a coal plant for up to five years. Such a bill, sponsored by Rep. Larry Buschon (R-IN), is pending in the House. Providing a tax credit for coal plants will help make the electric grid more reliable and hold down the cost of electricity production by preserving energy diversity. This, in turn, will result in lower energy costs and a more competitive position for U.S. manufactured goods in world markets.

Although the short-term picture for coal is challenging, the long-term picture is cause for optimism. The U.S. has the world’s largest coal reserves — and our coal fleet is cleaner than ever. Coal should not be seen asa problem to be fixed but rather part of the solution to our nation’s current energy challenges.

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Ah, crypto-currencies. Whether in a bull or bear market (sometimes we see both before lunch), they bore neither fans nor skeptics.  The still-young 2018 has been rough for the nascent asset class, as the four most prominent vehicles (bitcoin, ethereum, ripple and litecoin) have declined by 42%, 39%, 40% and 74% respectively after logging spectacular gains last year.
Beyond financial losses, the pullback seems to be taking a toll.  According to Bloomberg: “Online searches for ‘bitcoin’ fell 82 percent from December highs, according to Google Trends. Tweets that mention the coin peaked Dec. 7, at 155,600, and are now down to about 63,000, BitInfoCharts says. And the number of bitcoin transactions is off 60 percent from its record on Dec. 13, according to Blockchain.info” (Almost Daily Grant’sMarch 16).
Crypto-ficcianados have lately contended with more than falling prices and waning public interest.  Yesterday, Reuters reported: “Twitter, Inc. will start banning cryptocurrency advertising [today], joining Facebook and Google in a clampdown that seeks to avoid giving publicity to potential fraud or large investor losses.”  In other words, the ubiquitous social media ads featuring author and investor James Altucher will be no more.  Altucher himself voiced his approval, telling Recode: “There are many scams and illegitimate services out there.” This afternoon, Coinbase reports that Reddit (which bills itself as “the front page of the internet”) no longer accepts payment in bitcoin for its Reddit gold membership program.
Regulators, too, are taking a stricter stance.  On Thursday, the Wall Street Journalreported that the Securities and Exchange Commission is scrutinizing up to 100 crypto-focused hedge funds: “Examiners are keen to inspect whether fund managers have bought the type of assets they advertised to investors in disclosure documents. Regulators also worry about the risk of crypto assets being stolen because hackers often attempt to breach exchanges where crypto-currencies are kept.” On March 2, Bank of England Governor Mark Carney told the Scottish Economics Conference that “the time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system.”
Meanwhile, efforts at wider implementation of the blockchain in the financial industry have recently suffered what appear to be major setbacks.  Today, Reuters reports that three separate projects undertaken by financial institutions to incorporate the distributed ledger technology have been halted.  One such example:
DTCC, known as Wall Street’s bookkeeper, recently put the brakes on a blockchain system for the clearing and settlement of repurchase, or repo, agreement transactions, said Murray Pozmanter, head of clearing agency services at the DTCC.
The project, which had successfully tested with startup Digital Asset Holdings, was shelved because banks and other potential users believed the same results could be achieved more cheaply using current technology, he said. “Basically, it became a solution in search of a problem.”
As prices fall, regulators circle and big tech heads for the hills, some investors are doubling down. Yesterday, Bloomberg reported that:
While ICO’s [initial coin offerings] were supposed to disrupt venture capital, such funding in blockchain-based companies is surging, with startups raising $434 million since December, the most ever in a three-month period, according to CoinDesk data.
“If a company goes on and gets an ICO, my equity is worth more,” Frank Meehan, partner at SparkLabs Group, said. “That’s really the game right now.”
CoinDesk calculates that ICO’s have raised north of $3 billion through February, more than half of their 2017 intake.  For the sake of their limited partners, VCs best choose wisely. Bloomberg goes on to note that 46% of such offerings either failed of were unable to attain funding, while 50 of 340 ICO’s have already failed this year.
Last week, CryptoKitties (which bills itself as an ethereum-based “game centered around breedable, collectible, and oh-so-adorable creatures” who can’t be “replicated, taken away, or destroyed”)  raised $12 million in seed funding led by Andreessen Horowitz and Union Square Ventures, with Mark Pincus (founder of Zynga) and Fred Ehrsam (former founder of Coinbase) lining up as investors.
Meanwhile CoinDesk reports that ethereum founder Vitalik Buterin recently penned a blog post arguing for the institution of rent fees on his network, where “users would be asked to pay to use the network based on how long they’d like their data to remain accessible on the blockchain.”  Evidently, permanence is a relative concept.

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We have just seen that whatever increases the expense of conveying commodities from one country to another — in other words, whatever renders transport more onerous — acts in the same way as a protective duty; or if you prefer to put it in another shape, that a protective duty acts in the same way as more onerous transport.

A tariff, then, may be regarded in the same light as a marsh, a rut, an obstruction, a steep declivity — in a word, it is an obstacle, the effect of which is to augment the difference between the price the producer of a commodity receives and the price the consumer pays for it. In the same way, it is undoubtedly true that marshes and quagmires are to be regarded in the same light as protective tariffs.

There are people (few in number, it is true, but there are such people) who begin to understand that obstacles are not less obstacles because they are artificial, and that our mercantile prospects have more to gain from liberty than from protection, and exactly for the same reason that makes a canal more favorable to traffic than a steep, roundabout, and inconvenient road.

But they maintain that this liberty must be reciprocal. If we remove the barriers we have erected against the admission of Spanish goods, for example, Spain must remove the barriers she has erected against the admission of ours. They are, therefore, the advocates of commercial treaties, on the basis of exact reciprocity, concession for concession; let us make the sacrifice of buying, say they, to obtain the advantage of selling.

People who reason in this way, I am sorry to say, are, whether they know it or not, protectionists in principle; only, they are a little more inconsistent than pure protectionists, as the latter are more inconsistent than absolute prohibitionists.

The following apologue will demonstrate this.

Stulta and Puera

There were, no matter where, two towns called Stulta and Puera. They completed at great cost a highway from the one town to the other. When this was done, Stulta said to herself, “See how Puera inundates us with her products; we must see to it.” In consequence, they created and paid a body of obstructives, so called because their business was to place obstacles in the way of traffic coming from Puera. Soon afterwards Puera did the same.

At the end of some centuries, knowledge having in the interim made great progress, the common sense of Puera enabled her to see that such reciprocal obstacles could only be reciprocally hurtful. She therefore sent an envoy to Stulta, who, laying aside official phraseology, spoke to this effect: “We have made a highway, and now we throw obstacles in the way of using it. This is absurd. It would have been better to have left things as they were. We should not, in that case, have had to pay for making the road in the first place, nor afterwards have incurred the expense of maintaining obstructives. In the name of Puera, I come to propose to you, not to give up opposing each other all at once — that would be to act upon a principle, and we despise principles as much as you do — but to lessen somewhat the present obstacles, taking care to estimate equitably the respective sacrifices we make for this purpose.” So spoke the envoy. Stulta asked for time to consider the proposal, and proceeded to consult, in succession, her manufacturers and agriculturists. At length, after the lapse of some years, she declared that the negotiations were broken off.

On receiving this intimation, the inhabitants of Puera held a meeting. An old gentleman (they always suspected he had been secretly bought by Stulta) rose and said, “The obstacles created by Stulta injure our sales, which is a misfortune. Those we have ourselves created injure our purchases, which is another misfortune. With reference to the first, we are powerless; but the second rests with ourselves. Let us, at least, get rid of one, since we cannot rid ourselves of both evils. Let us suppress our obstructives without requiring Stulta to do the same. Some day, no doubt, she will come to know her own interests better.”

A second counselor, a practical, matter-of-fact man, guiltless of any acquaintance with principles, and brought up in the ways of his forefathers, replied: “Don’t listen to that Utopian dreamer, that theorist, that innovator, that economist, that Stultomaniac. We shall all be undone if the stoppages of the road are not equalized, weighed, and balanced between Stulta and Puera. There would be greater difficulty in going than in coming, in exporting than in importing. We should find ourselves in the same condition of inferiority relatively to Stulta as Havre, Nantes, Bordeaux, Lisbon, London, Hamburg, and New Orleans are with relation to the towns situated at the sources of the Seine, the Loire, the Garonne, the Tagus, the Thames, the Elbe, and the Mississippi, for it is more difficult for a ship to ascend than to descend a river. (A Voice: Towns at the mouths of rivers prosper more than towns at their source.)

“This is impossible. (Same Voice: But it is so.) Well, if it be so, they have prospered contrary to rules.” Reasoning so conclusive convinced the assembly, and the orator followed up his victory by talking largely of national independence, national honor, national dignity, national labor, inundation of products, tributes, murderous competition. In short, he carried the vote in favor of the maintenance of obstacles; and if you are at all curious on the subject, I can point out to you countries where you will see with your own eyes road makers and obstructives working together on the most friendly terms possible, under the orders of the same legislative assembly, and at the expense of the same taxpayers, the one set endeavoring to clear the road, and the other set doing their utmost to render it impassable.

From The Bastiat Collection(2011) 

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About time. Just a monumental waste of time for so many. The only legitimate use that I have ever had for it is chasing deadbeats who owe money. It is quite a useful tracking tool.

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  1. If there are people in your organization who feel they are not free to suggest ideas, you lose. Do not discount ideas from unexpected sources. Inspiration can, and does, come from anywhere.
  2. It isn’t enough to merely be open to ideas from others. Engaging the collective brainpower of the people you work with is an active and ongoing process. As a manager, you must coax ideas out of your staff and constantly push them to contribute.
  3. There are many valid reasons why people aren’t candid with one another in a work environment. Your job is to search for those reasons and then address them.
  4. Likewise, if someone disagrees with you, there is a reason. Our first job is to understand the reason behind their conclusions.
  5. Further, if there is fear in an organization, there is a reason for it – our job is to (a) find what’s causing it, (b) to understand it, and (c) to try to root it out.
  6. If there is more truth in the hallways than in meetings, you have a problem. 
  7. Many managers feel that if they are notified about problems before others are or if they surprised in a meeting, then that is a sign of disrespect. Get over it.
  8. Careful “messaging” to downplay problems makes you appear to be lying, deluded, ignorant or uncaring. Sharing problems is an act of inclusion that makes employees feel invested in the larger enterprise. 
  9. A company’s communication structure should not mirror its organizational structure. Everybody should be able to talk to anybody.

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Back when Ronald Reagan was president, he pointed to many pages worth of “Help Wanted” ads in the Washington Post as one of many pieces of evidence that his economic policies were working.  His enemies on the left predictably responded that Reaganomics was merely producing jobs of the “burger flipper” variety.  The market that was the voting booth revealed Reagan’s critics as hopelessly deluded: with elections always and everywhere about the economy, he won re-election in 1984 in landslide fashion, 49 states to 1.

But to show readers just how similar and tribal left and right in the U.S. have become, consider the rollout of Flippy.  Flippy is a robot “employee” of the Caliburger chain, and he is apparently able to cook as many as 2,000 hamburgers per day.  Interesting about all this is that while Reagan’s backers once defended him against the assertion that his policies were only creating fast food jobs, modern members of the right are now criticizing lefty policies that are allegedly – drumroll please – destroying those same jobs.  It would be funny if it weren’t so sad.

In response to attempts to automate cooking, the right have happened upon what they naively presume is political gold.  They promote the illusion that the minimum wage mindlessly supported by the left is behind the rise of Flippy.  One conservative op-ed claimed that “raising the minimum wage will accelerate this [automation] trend by making even costly robots a better deal than increasingly expensive, minimally skilled workers.” The jobs the right decried in the ‘80s are apparently now really good ones that would be preserved if it weren’t for the evil left and its endless desire to foist wage floors on us.  In truth, Flippy reminds us how ridiculous both sides are.

Up front, the minimum wage should be abolished.  People should be free to transact with whomever they want, and at any wage.  They should even be free to pay companies and individuals for the right to work for them.  Many would do just that if they could apprentice under Jeff Bezos, Anna Wintour, Nick Saban, or Jose Andres.

Still, what’s missed by the right is that Flippy and others like him would be even more common if the minimum wage were zero.  As for the loony left, Flippy is a reminder that companies don’t seek out low-wage workers as much as they go to great expense to avoid them.  Caliburger’s experimentation with Flippy vivifies each of the previous assertions.

Regarding the silly notion that excessive wage floors brought on Flippy, let’s be serious.  What led to Flippy is the basic truth revealed by Caliburger executives that human burger flippers were tough to keep employed.  Simply stated, they were quitting too often.  Well, of course they were.  Low-wage jobs have long been marked by high turnover.  That’s why they’re low-wage and entry level.  People don’t stay in them long.  They attain skills, then trade them for better pay.  The turnover is very expensive for businesses given the time-wasting cost of training new employees.  Automation is a logical response to turnover; turnover that – if anything – would be exacerbated if the minimum wage were zero.  Think about it.  Are people more likely to leave low wage, or high-salaried jobs?

Furthermore, if conservatives had been able to read about Flippy free of a desire to score points against their surely mindless lefty adversaries, they would know that one Flippy costs $100,000.  Think about the previous number for a minute.  The cost of Flippy loudly reveals how little the wrongheaded minimum wage hikes have to do with Caliburger’s purchase of same.  $100,000 amounts to much more than a forced wage increase.  Flippy is a reminder of just how expensive employee turnover is.  To reduce that cost, Caliburger is spending in the six figures.

All of which brings us to the popular view on the left that investors and corporations migrate to the lowest wages possible.  What a laugh, except that such economic illiteracy is disturbing.  How could even the ignorant believe what is so brightly incorrect? Back to reality, much as Caliburger has found that low-wage workers are incredibly costly thanks to endless turnover, so do businesses of all stripes strive to pay wages and salaries that keep workers around.

Turnover is once again very expensive.  It’s so expensive that a hamburger chain is willing to spend $100,000 on a robot in order to avoid what is a costly headache.  All this is a reminder that cheap labor is the opposite of cheap, but also a reminder that handsomely rewarding entry-level work would be the path to bankruptcy for businesses.  It would be simply because entry-level workers don’t want to do entry-level work.  They’re once again looking to move up in the world. They want their work skills to evolve.  Walmart isn’t greedily paying low hourly wages as much as high pay for entry-level workers at the retail giant would still occur in concert with costly turnover. To be clear, low-wage workers are paid low wages precisely because their inevitable departures are very expensive.

All of this helps explain why low-wage workers should lovingly embrace the robot.  That robots are job-destroyers speaks to their genius.  Robots have the potential to destroy the entry-level jobs that workers plainly don’t want.  If robots can erase what’s not desired, they won’t erase work as much as the definition of “entry level” will change.  And it will change for the better as first-time jobs involve the exhibition of more in the way of skills, all at higher pay.

Until then, left and right need to try to be serious.  Fun as it is to expose either side, the wage/robot debate reveals each tribe as clueless.  Flippy isn’t “taking our burger flipper” jobs, and the fact that he isn’t reminds us how much businesses of all stripes would love to compensate exponentially more fulfilled workers at exponentially higher pay.